Rippleshot Blog

Let’s face it. We’re all bombarded every day with too many reports, too many articles and too many studies to keep up with. At Rippleshot, we work hard to sort through all the noise to bring you relevant news, tips, and resources you can really use to make your operation smoother by equipping your teams with tools to learn how to fight fraud faster and more effectively. Catch these 10 resources.

Across the payment fraud ecosystem, there’s a lot of data about the state of card fraud, why it’s rising and how it’s changing. What’s not always easy to do is track relevant data as it enters the market. After all, data changes as quickly as the speed of fraud evolves.

To help keep issuers up to date with what stats are dominating the market, we’ve gathered data from recent studies across the market to show what threats are most prevalent, what issuers should be tracking and why they need to be detecting and stopping the spread of fraud faster than ever.

Solving ATM fraud has become a 2 billion-dollar question. (The impact of ATM skimming on a global scale). Getting to the bottom of ATM fraud means having a better understanding of how fraudsters think, how quickly they act and what payment channels they are targeting most.

In a recent webinar hosted by the ABA and Rippleshot's Chief Data Scientist Randal Cox, we discussed case studies of actual fraudster behavior and explored patterns of ATM misuse that help financial institutions fully understand the scope of this problem — and why it’s getting worse. [Catch the full webinar here].

October is cybersecurity awareness month — a prime time for banks and credit unions to re-think how they are managing their card fraud detection strategies. Then again, companies should be doing this the other 11 months of the year, too.

Financial institution leaders need to be constantly thinking about how to evolve their card fraud detection management and update their cybersecurity measures - or risk making their organizations increasingly vulnerable. Today, fraud management is more than just reacting to industry alerts. Being reactive, instead of proactive, about cybersecurity, will leave an organization always playing catchup.

Globally, ATM skimming fraud is a $2 billion problem. This is a rapidly-growing issue that’s become a major pain point for banks and credit unions already faced with increased challenges on how to manage their fraud-fighting measures.

Another problem? ATM skimmers are easy to buy online. What used to be something that was only accessible on the dark web can just as easily be bought on a marketplace today. Bottom line? If fraudsters want a skimmer, they can get their hands on one. 

ATM fraud continues to rise at alarming rates. Compromises from ATMs and POS devices rose 21 percent in the first half of 2017, when compared to 2016’s same figures, according to FICO. Compromised cards rose by 39 percent. Keep in mind these figures don’t account for holiday card fraud — a time which banks and credit unions should expect to see a spike.

The Equifax breach that continues to make headlines is a game-changer for the financial services space. The biggest fear, of course, remains the unknown cost impact for banks and credit unions.

Inevetiably, in a breach affecting roughly half the U.S. population, the scope of this incident will be long-lasting. The end results won’t be known for some time since the real threat ahead lies in fraudsters’ ability to create false identities (AKA: synthetic fraud). 

To help combat the fallout from this breach, we've gathered four tips that banks and credit unions should keep in mind as they devise their strategies for keeping up with the spread of fraud (and fraudulent accounts).

As if issuers didn’t have enough to worry about as they combat rising card fraud rates, the dark web market continues to be a haven for hackers to scoop up droves of credit card data — which is then used to commit even more fraud.

From advanced techniques, bots that make online fraudulent purchases to hacking payment systems, the packaging and auctioning of compromised cards across the dark web to commit and monetize card fraud occurs faster than a bank can detect a compromise, identify compromise cards, reissue the cards and call the cardholders. This has created endless troubles for banks and credit unions looking to stop fraud in its tracks.

Financial institutions are continuing down their digitization transformation by investing in innovative technology. The problem? This opens the floodgates for more touch points for hackers to breach. Another problem? Those fraudsters are more sophisticated than ever. Banks are using new tools to fight fraud— machine learning, automation, cloud technology, etc. —  but so are the fraudsters.

It's a bit of a Catch 22 that exists within the card fraud ecosystem.

“Technology begets technology.”

That’s one of the key takeaways from the 2017 Tech Trend Report from Future Today Institute. As newer technologies emerge into the marketplace, it creates space for more innovation (AKA: more technological advancements).

As the report highlights, there is a seismic shift in how automated technology solutions are changing the face of virtually every industry — payments and financial services included. With concepts like artificial intelligence (AI), machine learning, bots, Internet of Things (IoT) and big data carving a path for the next wave of innovation, the year 2017 and beyond is ripe for the adoption of new fraud fighting technologies.

There’s a new trend in the ATM fraud space. Not only is ATM fraud skyrocketing in recent years, fraudsters are getting smarter, faster and more effective. Today, fraudsters are targeting high balance accounts and withdrawing large sums in a short time span.

The latest data from FICO showed card skimming losses rose 70% between 2015 and 2016. That’s on top of the 546% increase seen in 2015. As for how 2017’s figures will shape up? We’ll have to wait and see. But based on the attention both in the mainstream media and within the financial services ecosystem on this subject, the problem appears as though it will get worse before it gets better.

There’s no silver-bullet solution to tackling the rise of ATM fraud, but there are technologies that can help mitigate the spread of fraud to lessen its impact. 

In one of the first scientific studies analyzing the international market for stolen data, Michigan State University criminologist Thomas Holt found that a batch of 50 stolen credit or debit cards can make a seller between $250,000 and $1 million on average. While those earnings certainly aren't small potatoes, they pale in comparison to what buyers can net from the illegal data itself: From that same batch of 50 cards, a buyer can swindle card companies and cardholders out of approximately $2 million if only 25 percent of the cards work — and nearly $8 million if all cards work.

According to a biannual analysis released by Experian, e-commerce fraud is on the rise. The company attributed the 30 percent increase in attacks to the United States' transition to more secure EMV chip cards late 2015. Even though at first glance that may seem counterintuitive, their hypothesis makes perfect sense. Here's why.

The U.S. Payments Forum announced in its 2017 Winter Market Snapshot that there has been steady progress in the U.S. migration to chip payments, with 9 out of 10 Americans commonly using chip cards at the approximately one-third of U.S. merchant locations enabled to accept chip payments. "Steady progress" is one way to look at it. Another way is that the deadline for POS terminals to become EMV compliant was October 1, 2015 — well over a year ago — and the findings tell us only one-third of merchant locations have made the switch so far.

So what's slowing them down and how can it be fixed? Let's take a look.

In a recent post, we looked at who is primarily at fault when it comes to a data breach – customers or financial institutions? As we found out, the majority of respondents reported they think the responsibility of protecting and securing customer data lies with the companies – not themselves.

If consumers are blaming organizations for breaches, what are the repercussions for financial institutions? A new report by Carnegie Mellon looks at the correlation between the impact of a fraud incident and customer loyalty and what is at stake when it comes to a data breach.

The Identity Theft Resource Center (ITRC) and CyberScout issued a new report stating that the number of U.S. data breaches reached an all-time high last year, totaling 1,093. This is a 40% increase from 2015 – quite a substantial increase indicating that rising concerns around cybercrime isn’t just hype, it’s a growing epidemic across not only the U.S but also across the globe.