The
holiday season is upon us, and we all know what that means—shopping. Lots of
shopping. Unfortunately for us all, our friends and family aren’t the only ones
excited about the upcoming gift-giving festivities—fraudsters are waiting in
the shadows, giddy at the thought of purchases being made by people who never
learned how to protect their personal and financial information.
Just
two years ago, over 40 million holiday shoppers were outraged to find that hackers had stolen
their credit and debit card information as they swiped their cards at Target retail
locations—one of the largest hacks of its kind. Since then, the prevalence of
online shopping has grown exponentially and we should expect instances of fraud
to increase accordingly due to hackers’ growing abilities to infiltrate online stores.
In fact, a recent ACI research study revealed that fraudulent transactions on e-commerce sites
increased in 2015, with one out of every 86 transactions found to be a
fraudulent attempt.
Additionally,
financial institutions and retailers are in a time of transition as they switch
to EMV technology, making them vulnerable to fraud. The move to switch to more
secure chip cards for in-store purchases, which seeks to decrease fraud
long-term, is likely to increase fraudulent attempts during the transition
period. Merchants who are still running magnetic strip transactions are
significantly more vulnerable, as fraudsters will target their facilities in an
accelerated manner before time runs out.
Members
rely heavily on credit unions to protect their data and safeguard financial
transactions, but that is only half of the equation. Credit unions have a
responsibility to arm their members with educational tools and practical advice
on how they can decrease their chances of becoming victims of holiday fraud. Below,
we’ve compiled several tips that can help keep your members safe when shopping
online:
- Beware of mobile checkouts. While e-commerce certainly makes life more convenient, online technology has an abundance of loopholes
- “Buy Buttons” are too new to trust. The addition of click-to-purchase technology to social media is transforming it into an online marketplace, but the concept is still so fresh that retailers may not have sufficient protections in place.
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Avoid opening emails you don’t recognize. As mobile technology permeates nearly every facet of our lives, phishers now are attempting to steal consumers’ financial information and inconspicuously request money through phishing attempts online, such as emails.
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Keep a close eye on your accounts. Members should pay close attention to ACH items and outgoing wires on each of their cards and accounts to ensure there is no unauthorized activity.
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Make your credit union aware of travel plans. Encourage your members to inform your credit union if they plan to travel out-of-state for the holidays. If they are not traveling, it will be simple to flag purchases made in an unusual location.
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Consider lowering daily limits. Especially during the holiday shopping season, it can be a wise move for members to lower their daily spending limit to decrease risk should their information be compromised.
- Stay educated, stay safe. Teach your members about anti-fraud measures your credit union has in place to protect them so that they better understand their own responsibilities.
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Keep the lines of communication open. It’s easier for members to pick up the phone and ask questions when there is an ongoing dialog with their credit union about online security. Perhaps someone is unsure about a charge but won’t investigate further because they are afraid to ask or don’t know who to talk to. Make your credit union a place where members feel comfortable coming to ask questions they might think are silly.
It’s
important to note that there is no way to guarantee 100 percent safety for anyone.
Hackers inevitably find ways to exploit system weaknesses as fast as merchants
can fix them – especially online. Fortunately, by following a few simple safety
precautions, your members can greatly reduce their risk of becoming another
fraud statistic. So play it safe, stay smart and stop fraud before it starts.
John Freeman
Senior VP of Compliance and Security
EPL, Inc.
