Warnings issued over Man-in-the-Phone fraud attacks

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LONDON - Ever-resourceful fraudsters have developed a new technique to gain access to personal consumer bank information. Man-in-the-Phone fraud attacks involve the fraudster calling the customer impersonating a bank representative to inform them that their savings, checking or card account may have been breached or compromised.

The fraudster advises the customer that in order to remedy the situation they should remain on the line and verify a few account details. At the same time, the fraudster initiates a call to the customer's bank and connects the customer with a real bank representative while the fraudster remains muted on the line. The bank requests authentication information, such as social security number, passwords and other personal information, which is then provided by the customer. Once the personal information is provided, the fraudster quickly ends the conference line and informs the customer that the issue has been resolved. Meanwhile, with the personal information gathered during the call, the fraudster can take over the customer's phone banking relationship and transfer money out of the customer's accounts.

"We help many of the largest retail banks, investment banks and brokerage firms protect themselves and their clients from all types of cross-channel fraud attacks," says Paul Henninger, director of fraud solutions at Actimize. "With our unique perspective into the operations of financial institutions around the world, we can spot trends as they occur. We've noticed an accelerating trend in Man-in-the-Phone attacks. We hope that by publicising this new trend, we can help reduce its impact on individuals and our banking clients."

Actimize recommends that banking customers never share account or personal information with anyone that calls and requests to 'verify' banking credentials. Customers should always tell such callers that they will call the bank to provide such information using the bank's phone number listed on the back of an ATM, debit or credit card. While this sounds obvious, many consumers do not take this simple precaution. The vendor also recommends banks combine cross channel behaviour profiling and anomaly detection technologies with better call centre processes and training. Call centre employees should be trained to listen more closely and ask who originated the call. Attacks may be thwarted or losses minimised if bank employees ask simple (but random instead of static) security questions at various points in the phone conversation when confirming personal credentials. Fraudsters are less likely to trick customers into sharing answers to several security questions.