The Illusion of Declining Account Takeover Attempts

In a recent Bank Info Security article, Account Takeover: Better or Worse?, Tracy Kitten interviews Doug Johnson, Vice President of Risk Management Policy for the American Bankers Association to get his expert opinion on the state of account takeovers and identity theft.

ACH fraud may be defined as many different fraud types including account takeover and payments fraud. Because there are no statistics on the total ACH losses for 2011, there may be the illusion that losses are down. In my opinion, the trend may seem that ACH fraud is decreasing due to tighter controls, but when I speak with industry colleagues, I tend to hear the opposite.

Some of our Canadian customers are seeing account takeover attempts on the increase either through synthetic identities or through ACH/DEFT fraud. Since Chip and PIN technology has penetrated most of the customer-base, Canadian banks are preparing for the next big threat. Could it be ACH/DEFT fraud or are we going to see more traditional fraud such as check or even physical fraud (removing the ATM machine from the branch)? What about ACH kiting? Is this a new fraud type or is it in the check fraud schemes?

We have also heard that up until now traditional fraud detection has been focused on wire transfer for compliance or AML reasons but not necessarily to combat fraudsters who are changing focus to get ‘more bang for their ”proverbial” buck’ on commercial and corporate banking. Predicting is hard but putting in a multi-layered strategy including authentication, behavior analysis and anomaly detection should help decrease this type of fraud.

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