Archive for the ‘Fraud’ Category

Consumers Speed up Card Replacement Cycle

Posted on August 11, 2017 by Laura Lam

Despite the heightened security that comes with EMV chips and tokenization, consumers remain worried about their personal data being exposed in a seemingly nonstop parade of breaches. This leads to many cardholders requesting a new card as a precaution, even if they have no evidence that they were directly affected by a particular breach. “It’s less about their cards being compromised than seeing news about a major breach at a place where they shop,” said Rob Dixon, product director at CPI Card Group.  “The customer wakes up and sees a report about a breach, and wants to have his or…

Subprime Auto Defaults are Soaring

Posted on August 02, 2017 by Laura Lam

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud.  Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017.  A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.  In July, 90-day auto loan delinquency rates eclipsed 3.8%, their highest levels since the financial crisis. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis. But since the Great…

Mortgage Risk Hits Highest Level in 2 Years

Posted on July 12, 2017 by Laura Lam

The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications increased in May to levels not seen since 2015, according to First American Financial Corp.  The frequency of defects, fraud and misrepresentations increased 2.5% in May, according to the Application Defect Index. This is an increase of 13.7% from the year before. “The Loan Application Defect Index is now reaching levels of risk not seen since 2015,” First American Chief Economist Mark Fleming said. “While risk is growing in both purchase and refinance transactions, it is important to recognize that loan application defect, fraud and misrepresentation…

Banks: Are There Too Many Cybersecurity Alerts?

Posted on June 27, 2017 by Laura Lam

Security alert overload, a source of frustration for bank security departments for some time, appears to have careened out of control.  A survey of bank security chiefs by the research firm Ovum documents how high the daily volume of messages about possible security incidents has grown.  Over a third (37%) of banks, it turns out, receive more than 200,000 security alerts a day. “It’s too much for humans to cope with, even at banks with the largest security teams. Adding more operators isn’t the solution, the problem needs to be solved through automation,” said Rich Baich, chief information security officer…

Electronic Communications: A Growing Compliance Risk

Posted on June 01, 2017 by Laura Lam

The 7th annual Electronic Communications Compliance Survey from Smarsh reveals that finaical firms are struggling to keep up with the multitude of electronic communications channels.  More than half of respondents (52%) cited text messages as their current No. 1 source of non-email content compliance risk. About 33% of respondents cited social media communications as the greatest compliance risk, and 8% cited instant messaging. The survey also found that almost half of firms have no oversight or retention of text messages.  “Firms need to leverage new and emerging channels to communicate with their customers and stay competitive, but they’re failing to manage the risk,”…

1.4 Billion Data Records Compromised in 2016

Posted on April 21, 2017 by Laura Lam

Cyber attackers launched 1,792 data breaches in 2016, which led to almost 1.4 billion data records being compromised worldwide, according to the newly released Breach Level Index (BLI) report from security provider Gemalto.  Identity theft was the leading type of data breach last year, accounting for 59% of all data breaches, the report said. More than half of the data breaches (52%) in 2016 did not disclose the number of compromised records at the time they were reported. The BLI is a global database that tracks data breaches and measures their severity based on multiple factors such as the number…

Prime Target: Cybercriminals Set Sights on Tax Pros

Posted on April 04, 2017 by Laura Lam

According to security experts, tax preparers are a special target for cybercriminals.  Tax preparers make perfect targets because their hard drives hum with “personal identifiable information” – such as scans of clients’ driver’s licenses, W-2s and previous years’ returns – that cybercriminals want. Preparers are obligated to protect access to this information, as well as ensure that the data isn’t modified or damaged – but that can be difficult, particularly for smaller practices.  Cybercrime’s global economic impact has reached $1 trillion and spawned a sophisticated industry that is learning to steal more effectively from corporations and Main Street alike. Globally, cybercrime…

Auto Finance Fraud Could Hit $6 Billion

Posted on March 30, 2017 by Laura Lam

PointPredictive, a provider of fraud solutions to banks and finance companies, details a new analysis confirming that auto financing fraud risk has been rising for several years, but remains hidden in credit losses.  PointPredictive estimates the annual value of auto finance originations that contain some element of misrepresentation may be as high as $6 billion in 2017, which is twice as much as 2016 estimates. The analysis revealed that auto financing fraud can be broken into 3 separate categories: Known fraud that finance companies have been able to identify. Hidden fraud that ends up misclassified as early or first payment…

New “Invisible” Cyber Threat for Banks

Posted on March 07, 2017 by Laura Lam

Malicious software, the type criminals use to steal online banking login credentials from customer or employee desktops, has been getting more stealthy and effective over time, as its authors get progressively better at evading antivirus and anti-malware programs. But there’s an emerging generation of malware that’s even sneakier. It’s not only designed to escape detection, it can lurk in computer memory or a legitimate computer tool, where normal security software can’t see it.  Malicious code that runs in memory is called “fileless.”  Such attacks are increasing “because they are much harder to detect than file-based malware,” said Rick McElroy, security…