Complaints About Spoofing Could Make it Harder for CUs to Reach Members

Florida’s Attorney General said skimming and spoofing scams are on the rise in the state, and that could make it trickier for credit unions and other financial institutions to get in touch with members about legitimate issues.

In a June 27 consumer alert, the agency said the Florida Department of Law Enforcement was getting a growing number of reports about criminals using skimmers to steal credit card and debit card data. The criminals then use spoofing technology to call victims and pose as employees of their financial institutions. During the calls, criminals tell the victims that their accounts have been compromised and that the financial institution needs the CV2 security code from the back of their cards in order to “freeze” their accounts. The scammers subsequently use the information to make fraudulent purchases, withdraw money from the member’s account or sell the member’s account information, according to the Attorney General’s office.

“This scam incorporates some of the worst uses of modern technology to drain victims’ bank accounts and ruin their credit,” Florida Attorney General Ashley Moody said. “Floridians must arm themselves with the latest information and take steps to avoid these fraudsters to protect their hard-earned money.”

The attorney general’s office encouraged consumers in Florida to pay with cash or EMV credit cards rather than with debit cards, among other things.

It also told consumers to hang up if a caller claims to be from a financial institution and asks to verify or confirm account information.

Florida residents aren’t the only people dealing with scam calls. Last year, a study by mobile technology firm First Orion found that about 29% of all mobile calls in 2018 were scam calls. By 2019, about 45% of all mobile calls would be scams, it predicted.

So-called neighborhood spoofing, in which the scammer makes the call appear to be from a local number, was the most popular method for getting people answer scam calls, it noted.

In Florida, according to the attorney general, criminals have been taking things a step further and making their calls appear on caller ID as if they’re from victims’ financial institutions.

Ann Davidson, who is VP of risk consulting for the bond division of Minocqua, Wisc.-based Allied Solutions, said her company is seeing a string of shared-branching fraud, as well as what she called “authentication” fraud at credit unions.

Authentication fraud continues to occur at credit unions call centers, she said.

“We recommend the credit union may not want to use a third-party call center to perform the authentication of their members. Call center fraud continues to increase, and this is an easy target for the bad guys,” she said.

Credit unions should layer the levels of authentication, she noted. “Authenticate, authenticate, authenticate,” she said.

Having members freeze their accounts with all three credit bureaus can also help prevent criminal access to and use of information that makes it to the dark web, she added.