RANCHO CUCAMONGA, Calif.-Credit unions need to pay greater attention to PIN fraud, because it's rising fast.
Credit card processors warned that even while PIN fraud represents an insignificant amount of total card fraud, it is rising at a rate far above signature fraud.
What's causing the increase over the last year is thieves gaining access to new technology and software that makes it much easier to obtain card and PIN numbers, a task more difficult than stealing standard signature credit card information.
"The fraudsters are more sophisticated and so is their technology," said Connie Trudgeon, VP of operations for Co-Op Financial Services. "Programs available today make phishing scams so much easier to create and execute, so crooks can get a whole lot of numbers and PINs for not a lot of effort."
Trudgeon said the latest numbers show that 88% of fraud is non-PIN, but several months ago it was 92% non-PIN.
What is also now making PIN more attractive to criminals is that fraud detection formulas pay less attention to PIN due to the two-factor authentication, explained JB Rambaud, GM, risk, for the Brookfield, Wis.-based Fiserv. "By default these transactions have been more trusted and the fraudsters know that. We are taking much more aggressive actions to monitor PIN activity."
Rambaud advised credit unions to be more proactive with PIN. "Just because it is not big, yet, does not mean it can't become a significant issue for you. Unfortunately some of the credit union's risk staff wear multiple hats, which can lead some to ignore an issue unless the problem is staring them in the face."
With PIN ATM withdrawal limits now at $2,000 a day, crooks realize PIN theft can lead to big hits at once, which is stepping up the pace of PIN fraud. The adoption of the tougher-to-crack chip-and-PIN card technology in Europe has also encouraged criminal rings to send thieves to the U.S. to perpetrate PIN fraud.
"Crime rings are targeting cities across the eastern and western U.S., and even the Midwest," said Karen Postma, cards risk senior manager for The Members Group in Des Moines, Iowa.
