Time magazine’s third place choice for the 2016 Person of the Year was “The Hackers.” Time is famous for choosing those that they believe have the most impact on people’s lives, not the person that they liked the most. Hitler was once their top choice. Although hackers weren’t the top pick this year, the editors at Time were certainly fully aware that hackers and other digital criminals are having an impact on everyone’s lives, directly or indirectly. Controlling digital crime with effective fraud management tools is a business necessity, not an option.
A Few Reasons Why Fraud Management Is Vital:
Millions of Credit Card Thefts
Credit cards have long been and remain a primary target for digital thieves. Many of these crimes originate from foreign nations. Nigeria, for example, is notorious as the source of fraudulent emails promising riches in exchange for only a “small processing fee.” The U.S. is ground zero for hackers, being subjected to more digital attacks than any other nation.
Multiple hacks of large American businesses have compromised millions of individuals, putting their credit card data and other personal information for sale on the black market. Hackers accessed 145 million records from Ebay, 109 million records from Home Depot and 83 million records from JP Morgan Chase. One Russian hacker stole almost 3 million credit card numbers. This is a very profitable crime – a single credit card number is worth from $5 to $50 while a stolen health record including credit card and other personal information can be sold for as much as $500. Stolen cards or card numbers are typically resold several times.
Some of those stolen credit card numbers are used to produce counterfeit cards for use at retail establishments, just as authentic stolen cards are used. A greater number of these stolen credit card numbers are used for online transactions. Many of those stolen card accounts will have been canceled and replaced with new cards by the customer, but not all. In any case, customers expect that if their account is fraudulently charged, they will be made whole. Effective fraud management technologies can prevent a transaction being concluded with a stolen card, a much preferred outcome for all concerned.
Fraud Management : Types of Credit Card Thefts
Credit card number thefts can involve no technology at all or be very high tech.
- Card numbers are stolen at restaurants, bars or other retail establishments when the card is momentarily out of sight.
- Credit card readers are modified at the register when the clerk is distracted by a fake emergency a short distance away, allowing a device to be added to the card reader that will capture other customer’s card data.
- A skimmer attached to an ATM, gas pump, vending machine or other unmanned credit card reader sends a Bluetooth signal to a nearby laptop until it is discovered.
- Malware is sent to computers or networks without adequate security, allowing information to be accessed by a hacker.
- Malware disguised as a legitimate email attachment can cause havoc in multiple ways. While it can seriously damage a system, the greatest amount of damage can be caused if the malware remains hidden while making confidential information vulnerable.
- Large scale digital attacks by organized gangs or foreign governments steal millions of card records.
One credit card theft often results in multiple victims: the individual who owned the card, the retailer who was paid with a stolen card and the financial institutions who issued the card. Repercussions from card thefts can extend into the future. Businesses and financial institutions need to make fraud management a top priority or suffer financial losses, decreased customer satisfaction and a very negative impact on their brand.