UK Financial Institutions Lose £20m Every Year in Call Centres

Financial institutions in the UK are losing more than £20million each year to fraudsters targeting call centres. According to a report from fraud protection and authentication company Pindrop, the UK suffered double the rate of attacks than the US, experiencing 1 in 700 fraudulent calls in 2015, compared to the 1 in 1,700 in the US, during the same period.

Using its patented ‘Phoneprinting™’ technology, Pindrop analysed over 10 million calls to major enterprise call centres in the UK and US, to illustrate the extent of fraud targeted at call centres. The 2016 Call Centre Fraud Report compiles these findings and indicates call centre fraud is on the rise on both sides of the Atlantic. In calculating the average cost of fraud, financial institutions in the UK are losing £0.51 to fraud on every call. For a large call centre receiving 40 million calls per year, this adds up to an average of £20 million in losses every year.

Strong online and mobile security plus the abundance of breach data and availability of Chip and Pin (EMV technology) means cybercriminals are changing tactics, exploiting the weakest link in the organisation: the call centre.

Matt Peachey, General Manager, Pindrop EMEA comments: “We define call centre fraud as any interaction between a criminal and a call centre agent. Our report shows that a criminal will make up to five calls before completing a fraudulent transaction in order to get as much information from agents as possible to then use at a later date across any channel.

“Call centre agents aren’t fraud experts. They are tasked with providing genuine customers with a great experience and as such are being targeted by criminals making them the weakest line of defence in any attack. By equipping agents with solutions to better identify a suspicious call quickly, they can also prevent the pre-fraud data gathering activities that lead to increased fraud across the phone and other channels.”

Recent figures from the Office of National Statistics estimated that 5.1 million fraud cases took place in the UK during 2015 while figures from organisations such as the Financial Fraud UK (FFA) showed that telephone fraud rose by 92% in 2015. Within its report, Pindrop confirms that the true extent of call centre fraud is much higher than what is currently known.

Mike Haley, Deputy Chief Executive at Cifas, a not-for-profit organisation that works to protect businesses, charities, public bodies and individuals from financial crime, comments: “Fraud continues to be a growing issue in the UK and establishing the true scale of fraud is far from simple. However, the more information that is available, the more we can start to build an accurate picture of the fraud landscape. This report from Pindrop shows that the call centre continues to be exploited by fraudsters. As the UK’s leading fraud prevention service, we are always keen to encourage organisations to look at new and innovative ways of staying one step ahead and protecting themselves and their customers from fraud.”

Other key findings from the report reveal that the majority of fraudsters attacking UK financial institutions are calling from within the UK with domestic calls making up 72% of those fraudulent calls recorded. The report also identifies that mobile phones are the most popular device used to launch fraud attacks, which has been encouraged by the availability of tools and apps that allow fraudsters to easily spoof their telephone number or distort their voice.

Pindrop warns that UK financial institutions face a rapid increase in call centre fraud and highlights that current strategies for fraud prevention, like voice biometrics, while good at identifying genuine customers, cannot identify fraud.

Peachey concludes: “A siloed strategy for fraud prevention has proven ineffective today. Instead a multi-layered approach must be implemented to quickly and accurately identify the risk factors that can better track fraud attempts across multiple channels and flag accounts that have suspicious activity.

“Pindrop’s patented ‘Phoneprinting’ technology helps our customers analyse 147 factors of call audio to uniquely identify the calling device, geography, and other information that indicates a suspicious caller. Incorporated into a strategy that is geared towards stamping out fraud on the phone channel means that financial institutions and their genuine customers have the confidence that transactions are safe and action is finally being taken to protect this channel.”

For more information about Pindrop, visit their website.