19DECEMBER - JANUARYCFO TECH OUTLOOKJohn is very grateful that Donna not only identified the fraud, but also called to file the claim for him to get his money back. However, it's been a week and John's money has still not been reimbursed, so he calls ABC Bank and inquires about his claim status. ABC Bank has no record of John's claim filing, and tells John that he has probably been scammed. John, however, is completely confused, since his call log proves that it was the bank that called him! There are many variations to this, and years ago, the questionable transaction would not only be hinted at, but completed. John would log into his account and see an actual $1000 payment to Wal-Mart, so clearly the phone call following this would have merit. Since then, the fraud groups realized the manpower and costs to perform the "baiting" transaction are not really necessary to trick a victim. Why do these schemes work so well? Well, they mimic exactly what occurs when the bank questions a customer about a suspicious transaction. The difference is that a real bank representative would NEVER ask for your username OR password. And, for customers of banks without digital capabilities, the fraudster will simply ask for debit card and PIN numbers, which is another thing we wouldn't do. That is why I reiterate that this is not a scam from or against Zelle. It is a scam against humans, who, unfortunately, are continuously the weakest link in all transactions. This scam comes in so many forms that banks have been dealing with it for years. There is bill payment fraud, access to secret codes without permission, and even setting profiles up to fund an account linkage or transfer to another bank or PFM app. The results of many of these scams may not be evident for several months. I am pretty sure Zelle is being singled out for its speed and ease of payment, but it is the customers of the banks that use the app that are the real targets. Not to mention, the recent saturation of Zelle means there is a high probability that 7 out of 10 victims would use the app on their online profiles. The best way to prevent this fraud, and its many variants, is customer education. Of course, these efforts are fruitless unless the customer has an inkling that he or she is being scammed. In the industry, I continue to read and hear comments from vendors, which are echoed by the media, that banks don't have the right fraud prevention tools, or that they don't understand the scope of the fraud that is occurring I can confirm wholeheartedly that we do, but since fraud is such a small percentage of the traffic that occurs on any payment channel, legitimate traffic, along with customer experience and expectations, will always take priority. To summarize, I'm not a Zelle advocate, but I am an anti-fraud professional who would like to redirect the attention to putting an end to the actual scam by redirecting the industry`s focus. This is an impersonation scheme, not a supposed "Zelle fraud." Fortunately, the FTC recently started cracking down on impersonation scams, but these schemes are really just low hanging fruit. I invite them to look at the app stores that carry spoof apps and determine the real reason that anyone would ever have to impersonate someone. These apps not only override caller id systems, they also come equipped with voice changers, after first offering a free trial, the cost usually settles around $4.99, and that's on the high side. And, while it is certainly true that the debate of who "should" reimburse the victims is a real one, we aren't EVER going to stop fraud, at its root cause, by only focusing on who will pay for it. We are allowing the fraudsters to have a field day while we all debate who is holding the proverbial hot potato. We need to stop the fraud by stopping the scam and eliminating the tools the thieves are using. Together, with a redirected focus, we can make fraud prevention become the new customer service.
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