2016 call center fraud report

2016 Pindrop™. Confidential.

CALL CENTER FRAUD REPORTDr. David DeweyDirector of Research, Pindrop

2016 Pindrop™. Confidential.2016 Pindrop™. Confidential.

THE CALL CENTER IS THE WEAKEST LINK

Human Element IVR Blind Spot Caller ID PII & KBA


WHAT IS CALL CENTER FRAUD?

Fraud TransactionPre-Fraud Post-Fraud

• Gather & Test Data• Change Contact Info• Reset PIN or Password• Set Travel Notification

• Wire Transfer• Card-Not Present• New Line of Credit• Loan Against Policy

• Check Transaction Status


CROSS CHANNEL FRAUD

PHYSICALHighly Defended

6+ Layers of Security

ONLINEHighly Defended

6+ Layers of Security

PHONELightly Defended

1-2 Layers of Security*


CALL CENTER FRAUD ATTACKS

2013 2015

1:2900

1:2000

• Growth Since 2013: 45%

• Contributing Factors:• Recent Data Breaches• US Chip Cards• Increased Security in

Other Channels


FRAUDULENT TRANSACTION LOSSES

2013 2015

$0.57$0.65

• Includes Only Phone Channel Losses

• Growth Since 2013: 14%

• Contributing Factors:• Fraudster Sophistication• Targeting Higher Value

Accounts


HIDDEN COST OF FRAUD

Experience Operations Cost Brand Regulatory Risk


KNOW YOUR FRAUDSTERYou Might Be Talking to a Fraudster if…


FRAUD WEAPONS OF CHOICE - VOIP

Fraud Non-Fraud

VoIP42%

• Contributing Factors:• Cost Efficiency• Spoofing• Difficult to trace

VoIP16%

LL23% LL

39%

Mobile35%

Mobile46%


FRAUD WEAPONS OF CHOICE - MOBILE

2011 2012 2013 2014 2015

• Contributing Factors:• Cost Efficiency• Spoofing• Difficult to trace

Mobile

Landline

VoIP


Fraud Non-Fraud

FRAUD ORIGINS - INTERNATIONAL

Int.49%

• Contributing Factors:• International

Organized Crime• Fewer Regulations• Difficult to Prosecute• Spoofing

Int.11%

Dom.51%

Dom.89%


FRAUD ORIGINS - DOMESTIC

2014 2015

• Contributing Factors:• US Chip Cards• Phone/Physical

Cross-Channel Attacks

36%

51%


INDUSTRY VARIATIONS


FINANCIAL INSTITUTIONS - ATTACKS

Brokerage Credit Union Bank Card Issuer

1:27001:2000

1:1400

1:800


FINANCIAL INSTITUTIONS - EXPOSURE

Brokerage Credit Union Bank Card Issuer

$10M

$29M

$11M $11M


LIFE INSURANCE – HIGH EXPOSURE

Fraud Attack Rates

Avg. Call Center Life Insurance

Fraud Exposure

$11M

$31M

Avg. Call Center Life Insurance

1:2000

1:12000


DEVICE INSURANCE – HIGH ATTACK RATES

Life In-surance

Brokerage Credit Union Bank Card Issuer Device Insurance

1:2700 1:20001:1400

1:800

1:12000

1:300


INTERNATIONAL VARIATIONSUS vs. UK


LONG TERM EFFECTS OF CARD-NOT-PRESENT

Fraud Attack Rates

UK US

Fraud Device Types

UK US

1:700

1:1700

Dom.72%

Dom.48%

Int.52%

Int.28%


MOBILE FRAUD IN THE UK

UK

US Mobile37%

Mobile64%

Landline14%

Landline16%

VoIP46%

VoIP22%


METHODOLOGY: PHONEPRINTING™

Pindrop’s Patented Phoneprint™

147 factors analyzedon every call

Risk ScoreEvery call, every time

Initial call

Geo-Location

Call Type

Risk Factors

Unique Phone

LossPacket loss, Robotization, Dropped frames

SpectrumQuantization, Frequency filters, Codec artifacts

NoiseClarity, Correlation, Signal-to-noise ratio

80%+ detection rate of ALL fraud calls <1% false positives


KEY TAKEAWAYS

• Enterprise call center fraud is expensive and growing fast

• Phone channel pre-fraud contributes to cross-channel attacks

• Fraudsters are targeting new industries with sophisticated attacks

• The UK offers the US a glimpse of the future of call center fraud


RECOMMENDATIONS

• Implement solutions to monitor and detect phone fraud

• Prevent attacks by monitoring for pre-fraud

• All industries should be aware of their expected fraud rates and exposure

• Use Phoneprinting to identify fraud risk factors


Q & ADownload the full report atwww.pindrop.com

2016 call center fraud report

Technology