Where Fraud Is Taking Place in Mobile Banking
MOUNTAIN VIEW, Calif.—A new report indicates that of all fraud cases involving mobile banking apps, 72% included remote deposit capture (RDC) and the use of fraudulent checks.
“RDC fraud is the latest example of fraudsters merging the old and the new—in this case committing classic social engineering and check fraud over modern banking channels and technology,” noted Guardian Analytics President and CEO Laurent Pacalin, referring to findings from the company’s in-house research into mobile banking fraud across Guardian’s 400 customers. “Use of mobile banking and RDC is skyrocketing, which puts banks and their customers at greater risk. This is another example that points to the need for financial institutions to be nimble and advance their fraud prevention capabilities to the point of automatic protection against existing and emerging tactics across traditional and new banking channels.”
A recent report on banking fraud released by the American Bankers Association highlights the impact mobile banking fraud is having on institutions of all sizes, with 100% of the largest financial institutions reporting RDC fraud and a 400% growth in losses reported over two years across financial institutions of all sizes, the company stated.
Guardian Analytics’ Mobile Fraud Trends research identifies the two schemes dominating mobile RDC fraud, both of which feature social engineering of a victim, and against which traditional forms of authentication and even newer forms of biometrics are defenseless:
- The Sweetheart Scam—fraudsters foster relationships online and then manipulate their victims into cashing fraudulent checks
- Fake online payday lenders—criminals trick prospective borrowers into unwittingly depositing fraudulent checks through RDC and then cash them out as a part of a fake loan approval process
“Financial institutions can easily defeat criminal attacks that use such varying combinations, even those that rely on the victim to authenticate,” continued Pacalin. “Using our behavioral analytics and machine learning solutions, our customers are successfully preventing losses and proactively helping their customers avoid future fraud problems.”
The Mobile Fraud Trends Report can be found here.