SUNNYVALE, Calif. -
Thieves nearly wire-transferred $18,000 out of one member’s account at Star One CU here last month. They could have stolen up to $100,000 via fraudulent ACH transactions from another account last year.
In fact, fraudsters could have drained more than $500,000 total from Star One accounts in just the past year, but they didn’t, according to Margarete Mucker, VP-remote services at the $3.5-billion credit union.
The thieves were stopped by FraudMAP, an online fraud prevention solution that alerts the credit union when a fraudster logs-in to a member account, said Mucker.
“We feel that we are now a step ahead of online fraud, even though we never can be 100% protected,” Mucker said.
In the case of the near-miss with the $18,000 wire transfer, a FraudMAP alert convinced Mucker that something suspicious was happening with a member’s account–even though there were no suspicious transactions.
A Red Alert
“It was a red alert, signaling high possibility of fraud, so we checked it against our risk score sheet and looked for unusual transactions,” Mucker explained. “But what we noticed instead was that there was an unauthorized log-in and that someone was viewing online check images several times, again and again. Now, that’s unusual behavior, so we placed an alert on the account, left a message for the member, and alerted our wire-transfer department.”
Sure enough, the fraudster soon placed a request for an $18,000 wire-transfer. Before placing the transfer, the wire-transfer department contacted the member, who confirmed the transaction was unauthorized, Mucker said.
FraudMAP considers the long-term online behavior of each individual member, such as when a member logs-in, and from what Internet Protocol address and computer operating system, according to Craig Priess, VP-marketing at Los Altos, Calif.-based Guardian Analytics, which provides FraudMAP.
“We deliver a rich history of each member’s online activity,” said Priess, “but that alone is weak.”
Consequently, FraudMAP combines individual member behavior with predictive models and builds a risk score for each member.
Looking For Deviations
Then, the solution looks for any deviations from the member’s typical log-in behavior as well as for matches to larger fraud patterns, he continued.
The FraudMAP package is stronger than other solutions, which only check for matches to industry fraud patterns, claimed Priess.
High-risk log-ins set off automated alerts to Star One staff. “We get 10 to 20 high and medium-risk alerts per day,” said Mucker. “And we’ve had about seven cases where we know for sure that we have averted fraud.”
The $18,000 attempt wasn’t confined to homebanking. It spread to the wire-transfer department as well–which demonstrates how FraudMAP extends its usefulness beyond the online branch, Priess said.
An Additional Informant
The wire transfer and account services departments have begun to count on FraudMAP as an additional informant when they have to make high-risk decisions, said Mucker. “FraudMAP alerts us as to how unauthorized log-ins may be linked to other fraudulent activity at the credit union.”
“It’s pretty common that a fraud attempt is made by the thief gathering information through multiple channels or means, while the online portion looks benign,” Priess added.
FraudMAP can tell Star One Credit Union some “very interesting” facts about member log-in behavior, such as which skiing hot-spots members frequent, Mucker said. But it’s this kind of behavioral knowledge that also helps the credit union decide whether log-ins are normal, she said.
Star One is working to integrate FraudMAP with Internet banking, provided by Calabasas, Calif.-based Digital Insight, which would enable transaction logging as part of the fraud prevention program, Mucker said. More than 50% of the Star One membership uses online banking, she said.
MORE
Read more about online fraud prevention at cujournal.com and search the following bolded terms in the archive:
It’s 2 a.m.: Do You Know Where Your Members Are (Logging In)?
Verify, Schmerify
Tracking The Dark Side Of Web
For info on this story:
* www.starone.org
* www.guardiananalytics.com (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
