Finance & Banking , Fraud Management & Cybercrime , Fraud Risk Management
Getting Down to the Roots of First-Party Fraud
Frank McKenna on How Customers Are Scamming Their Banks and How Banks Can Respond
First-party fraud hits banks from many different places - credit card fraud claims, bust-out schemes, lending fraud and synthetic identity fraud. The diversity of scams coming from the bank's own customers poses significant challenges in trying to spot fraudulent activity, said Frank McKenna, chief strategist and co-founder of Point Predictive.
See Also: Critical Condition: How Qilin Ransomware Endangers Healthcare
"It's about a $100 billion-a-year problem only here in the United States, making it the number one fraud type here," McKenna said. He said the growth of first-party fraud is difficult to track due to the lack of industrywide reporting but that it still outpaces the damage caused by identity theft.
"A lot of FIs, banks, finance companies - they do focus a lot on identity theft because it's such a big problem. But it's also easy to counteract that problem because there are a lot of vendor solutions," he said.
In this video interview with Information Security Media Group, McKenna discussed:
- The need for banks to recognize and measure the extent of first-party fraud;
- The importance of developing and implementing targeted analytics to mitigate fraudulent activities;
- How illegitimate credit repair companies exacerbate the problem.
McKenna has advised more than 200 banks, lenders and finance companies worldwide to help them achieve reductions in fraud. He also provides fraud management tips through his daily blog, FrankonFraud.com.
