RANCHO CUCAMONGA, Calif.-It may be time to start paying a little more attention to PIN debit fraud than in the past.
Connie Trudgeon, VP of operations for Co-Op Financial Services, cautioned that PIN debit, considered more secure than signature transactions, appears to be an area in which fraud attacks are growing. "PIN has always been considered so much more secure, but things like ATM and card skimming, and e-mail phishing are changing things. PIN fraud is on the rise compared with signature."
The latest numbers Trudgeon has seen show that 88% of fraud is non-PIN. "But several months ago it was 92% non-PIN. That's a big change in a short period of time."
What worries Trudgeon even more are reports that indicate a significant amount of personal information has been obtained by fraudsters and is waiting to be used. "Phishing attacks have been getting so much more sophisticated and successful. The FBI and Secret Service said the market is saturated by compromised data and there is just so much of it that criminals have not been able to act on all of it. This is very concerning."
Trudgeon said credit unions need to stay on top of the latest ATM and card skimming approaches, check their ATMs more often, educate members to pay attention to ATM card readers, and put notices on the machines to remind them to be vigilant. Trudgeon advised CUs to move to a neural network environment. "We are promoting having real-time functionality so the riskiest transactions are declined at point of purchase, rather than going through. That takes your fraud defenses to the next level."
Another step CUs can take is suspending large limits they have in place for some members. "It is amazing how many credit unions will have much higher daily limits than members need," Trudgeon said. "You can always let members know that if they need to make a large purchase to contact the credit union first. You can accommodate the member and not expose yourself to those large spending limits."
