According to data from LIMRA’s FraudShare, the shared industry solution to help financial services combat fraud, account takeover (ATO) fraud, an attempt by an imposter to access another person’s account, continues to increase and evolve.
Since its inception in late 2019, FraudShare has helped companies detect more than 200 incidents targeting over $31 million in account values.
“We currently have 53 companies actively using FraudShare,” says Russ Anderson, head of Financial Crimes Services for LIMRA, LOMA & LL Global, Inc. “Among our members we’ve seen both the number of account takeover attempts and the account values targeted going up each year.”
The average number of monthly incidents experienced by members increased 20% from five to six per month. The amount of money targeted also increased significantly. From 2020 to 2021, the average account values targeted went up 30%, from $216,000 in 2020 to $280,000 in 2021.
According to the LexisNexis Risk Solutions Cybercrime Report, online transaction volumes for financial services continued to grow — up 52% year over year. So many online transactions leave companies vulnerable to fraud. As companies focus on enabling greater online and mobile transaction capabilities, fraudsters are also changing their focus of attack.
“Companies need to be vigilant when it comes to preventing fraud,” notes Anderson. “One of the first lines of defense is educating employees and advisors.” FraudShare data shows employees tend to detect incidents quicker — in about 7 days, on average — than most other methods.
Our research shows an increase in fraudulent attacks using customer or advisor portals while attacks targeting contact centers and back-office processing centers decreased as a percentage of overall attacks. This is consistent with industry trends enabling more customers to do things using self-service via online channels.
“Fortunately, the number of fraudsters who were successful in accessing accounts via a customer portal was down 16%,” says Anderson. “This is a great indication that recent actions by members to shore up their online defenses are working.”
FraudShare has also seen an increase in people impersonating an advisor in an attempt to access the advisor’s book of business to access the accounts managed by the advisor. While the overall number of advisor impersonations were low, they increased significantly from 1.7% of incidents in 2020 to 3.3% of incidents in 2021.
“This is troubling because if a fraudster successfully impersonates an advisor, they can easily access dozens if not hundreds of customer accounts,” says Anderson.
Although fraudulent attacks can occur any day of the week, FraudShare data reveals there is higher likelihood for these incidents to occur on Mondays and Tuesdays. Overall, the number of attacks are consistent throughout the year.
“LL Global’s FraudShare is one of the most widely used tools to prevent third-party ATO fraud and a great source of related data to help members better understand and defend against these attacks,” Anderson says. “As people attempting fraud keep evolving, financial services companies need to be more sophisticated in finding ways to prevent them.”