Blogs

Fraud Happening in the EPCOR Footprint

·       Fraud at Retail Stores. Our members are seeing an increase in the theft of debit cards happening at retail stores.  For example, wallets are being stolen from purses while the cardholder is waiting in line at the checkout or while chatting with the cashier. Then, the thief takes the stolen debit card to another retailer to buy goods and makes the purchases on EMV-ready devices. A big issue here is you cannot charge the funds back to the merchant via the card network because they have EMV devices installed. This creates pain in the form of Reg E write-off losses when handling disputes because the stolen Debit Card led to unauthorized charges.

·       Social Scamming. There are many scams where fraudsters reach out via phone calls, emails, social media and other available avenues to request an account holder’s debit card number. Many account holders are receiving scam emails or phone calls from fraudsters posing as their own financial institutions. Share this information with your account holders:

o   Their debit card is theirs and theirs alone. They should not be shared with anyone. Encourage them to guard this information like they would their social security number.

o   A financial institution will never directly request information such as a person’s debit card numbers, as they already have that kind of account information on file. 

o   Account holders should never give out their login credentials to anyone for online banking systems or apps for any reason.

·       Fraud Using Digital Wallets. EPCOR members are reporting this type of fraud appears to be on the rise, as fraudsters are stealing card info and then inserting said information into their own digital wallet, such as Apple Pay, Google Pay, Samsung Pay or their own financial institution.  Then, they’ll just tap their phone at a retailer that accepts Near Field Communication (NFC) based payments or use whatever apps accept digital wallet payments. As an FYI, when the phone is tapped at an NFC device, that is a “point of sale card present” payment whereas goods/services purchased from an app is considered “card not present”.

·       ATM Skimmers. There are still ATM skimmers out there, whether that is placing a device over the card reader or drilling holes in the ATM to insert a skimmer on the chipset.  However, lately, fraudsters are getting even more clever and are creating devices small enough to be inserted into the card reader itself to steal information.  Additionally, phony panels that look exactly like what is normally on an ATM are being inserted, and they have tiny pinhole cameras to watch for PIN entry. While skimming technology may be difficult to overcome, advising your account holders to cover their hand while entering their PIN could help reduce the incidence of fraud on their card.

Here are a few additional debit card fraud prevention tips to pass along to your clients:

·       Safeguard your debit card, smartphone and computers.

o   Keep your cards and devices in safe locations and out of reach. 

o   Implement complex passwords/passcodes, both to unlock the device and to access accounts on Apps and websites.

·      Anytime you can use Out-of-Band Authentication (OOBA) to verify any payments performed on apps or websites, the better.

·      Always be careful where you swipe your card.

·      Utilize online banking either in website form or your financial institution’s app to check your online statement daily for any out-of-the-ordinary transactions. Make it a habit to check your account activity at least once daily and opt-in to receive alerts for account transactions.

·      Look out for each other. If you see any friends, family, co-workers or even complete strangers appearing to fall victim to a scam, speak-up and say something if you feel comfortable doing so. Sharing information can help reduce the incidence of fraud. 

We would like to say a personal thank you to those attending this year’s Payments System Update for sharing their stories and experiences. If you’re looking for opportunities to learn more about fraud trends and collaborate with EPCOR members in fighting fraud, consider joining us for our Virtual CompFraudulation Symposium, EPCOR Payments Conference – Spring or Fall 2023, EPCOR Payments University and our upcoming Quarterly Compliance and Fraud Review.