Attempts to report the fraud to financial institutions often took days and multiple phone calls despite the fraudulent accounts being opened in mere minutes. In one instance, a bank refused to take a fraud report until they could identify the victim through a driver’s license and video face identification. When the verification camera link did not function properly, the bank asked the now 99-year-old to go outside and have his daughter film him via the fraud reporting portal. Only after their facial recognition system confirmed his photo was the same as the driver’s license the victim supplied would the bank take a fraud report. This process took more than three hours to complete. This law enforcement-provided photo shows one of numerous journals they found containing hundreds of pages that criminals used to practice the signatures of their victims. Ultimately, a dedicated lieutenant with a local police department worked with the family and a U.S. postal inspector I knew worked with me to identify the perpetrators. After two years of continuing fraud, eight people were later identified and prosecuted in state courts in Ohio and Indiana. They received 6-8-year sentences. One of the main participants has a criminal record, including drug dealing and homicide, and he knew how to stay in the background. Fortunately, he was convicted in other courts of criminal activity unrelated to this ring and is in prison for an extended period. SECURITY & FRAUD CONT. What the Investigation Results Reveal for Bankers While the fraud illustrated above is a solitary case, in a world of millions of fraud cases per year, it reflects macro changes taking place in the world of fraud, specifically the following: ▶ The increasing knowledge and sophistication of the criminal rings targeting banks and their customers. ▶ The speed at which criminals operate to monetize their stolen information, documents and personally identifiable information. ▶ The speed at which bank transactions move (think FedNow and other Fed changes to “Instant Payments” initiatives). ▶ The inability of law enforcement and the criminal justice system to respond to the fraud epidemic. ▶ The evolution of “street criminals” to highly organized cyber-savvy fraud rings. ▶ The overall moral decline in the marketplace and its implicit invitation to get “easy money.” ▶ Identifying and authenticating identities for account openings and transactions. What Bankers Need to Address Identifying steps your bank can take to address the rapid changes taking place will involve: ▶ Investments in technology and fraud personnel equipped to use predictive modeling and AI. ▶ Customer dashboards incorporating transaction and maintenance activity as part of fraud strategy. 34 HOOSIERBANKER
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