From Check Fraud to Phishing, All the Old Tricks are Back with a Vengeance
June 1, 2009 - Linda McGlasson, Managing Editor

Bank fraud has evolved over the last several years (See: Fraud Update: The 13 Hottest Schemes You Need to Prevent), but some classic variations keep financial institutions busy.

Here are six old fraud tricks that are back with new twists to bedevil fraud departments and information security professionals.

#1. Check Fraud

Since 1997, the number of fraud attempts against bank accounts has doubled every two years. Ever since the desktop publishing era began with color copiers and computer scanners, counterfeit checks have become harder to detect, which is reinforced in the number of checks the New York crime group spread among the various banks in the city over a two-year period. Banks routinely process more than 10 billion checks each year, says a 2007 Federal Reserve payments study.

#2. Elderly and Immigrant Identity Fraud
#3. ATM Fraud/Skimming

This type of fraud made it into President Barack Obama's speech announcing his cybersecurity initiative, when he said "thieves used stolen credit card information to steal millions of dollars from 130 ATM machines in 49 cities around the world -- and they did it in just 30 minutes." The big question is: Can it happen at your institution? The answer is seen in the numbers from a Pulse EFT study (Pulse is one of the leading ATM/debit networks in the U.S.) -- the banking industry lost $662 million to debit card fraud in 2005. Of these losses, 60 percent resulted from ATM transactions, 37 percent from signature transactions, 37 percent from signature debit transactions and 3 percent from PIN point-of-sale (POS) transactions.

While the same Pulse study done in 2007 doesn't give a total loss due to debit card fraud, it does say that is higher than in 2005. Survey participants said they lost 5.40 basis points (0.054 percent) per dollar spent through signature debit transactions in 2007 and 1.09 basis points (.0109 percent) through PIN debit transactions. All of the 62 financial institutions surveyed in the 2007 Pulse study had debit cards potentially compromised in skimmers, and more than 80 percent of those surveyed reported implementing new fraud tools within the past year.

Even with the new fraud tools, stopping criminals from placing skimmers on your institution's ATMs require vigilance and monitoring by your employees.

#4. Phishing
#5. Vishing
#6. Insider Threat