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The financial services industry took a big hit in the past 18 months – $76 billion lost in Paycheck Protection Program (PPP) fraud, over $300 million lost in stimulus check scams, and a significant increase in credit card and check fraud. Overall, financial crime attempts increased by 109%. But rather than targeting institutions directly, fraudsters are going after the path of least resistance, which often is individual members. Their methods vary but include: IRS scams, romance scams or even sly account takeovers during P2P, where a hacker may impersonate a credit union employee as they help a new member open an account, ultimately stealing the account login information and transferring funds to their own account.

As much as we would love to rid the world of fraudsters, it is impossible. As new technologies emerge and the financial services industry becomes increasingly digitalized, fraudsters are also evolving and updating their strategies. And as we head into a post-pandemic environment and the government loans and relief programs dry up, fraudsters will begin to direct their attention back to traditional financial crimes. In 2021, we’ve already seen an uptick in traditional crimes such as ransomware, social engineering, identity fraud and money laundering. It’s safe to say the industry can use a refresh on how to fight back.

 

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