It’s the Most Wonderful Time for Fraud!

When popular variety show host and singer Andy Williams first crooned out the lyrics to “The Most Wonderful Time of the Year” in 1963, it was a simpler time without computers, cell phones, and social media. Instead of kids jingle belling and friends coming to call, everyone is texting and posting their holiday wishes on Facebook, Twitter and Instagram. Hosting parties, toasting marshmallows and caroling out in the snow have been replaced by gathering in online groups, sharing photos of holiday food, and singing along with YouTube videos of the latest holiday hits. One of the activities included in the classic song is the telling of “scary ghost stories,” a tradition that has been passed on over the years through numerous adaptations of Charles Dickens’ “A Christmas Carol.” Those scary ghost stories have taken a new twist with the advent of the Internet, the growth in e-commerce – especially during the holiday season – and the proliferation of cybercrime.

Today’s Grinches don’t limit their targets to the Whos in Whoville or don a jolly St Nick disguise to pilfer victims’ Christmas gifts and cash. With the help of not-so-social networking, seasonal spyware, spirit of giving scams, and phishing ploys, Bad Santas and their nefarious helpers launch digital attacks with speed and anonymity, withoout the remorse the big green guy experienced after after he stole Christmas from little Cindy Lou Who and her friends.

While it’s imperative to educate your customers and train your staff year-round on how to spot and mitigate fraud, it’s the most wonderful time of the year to remind them to be extra vigilant about protecting personal and corporate data. Studies have shown that forty percent of each year’s online fraud occurs during the months of October, November, and December. Last year, e-commerce fraud rose 33 percent over 2015, according to credit reporting agency Experian. Those numbers are likely to get an even bigger boost this year in the wake of the massive Equifax breach that exposed personal data on more than 145 million Americans. The exponential growth in digital gift cards is also expected to drive that number up.

A quick, easy, and low-cost way to deliver gifts to friends and families around the world, digital gift cards have become extremely popular for consumers – and fraudsters who can purchase them in virtually unlimited quantities for illicit use or quick resale. Fraudsters take advantage of the ability to blend in and avoid detection among the mass volume of consumers purchasing gift cards during the holidays. Fraudulent digital (and physical) gift cards purchased early in the month are not usually redeemed until late December, making it even more difficult for banks and retailers to catch the perpetrators.

Whatever ploy these crafty criminals use, nothing takes the festive out of the holiday festivities faster than dealing with a customer whose identity has been stolen or bank account cleaned out. Decorating your physical and online banking halls with the following safe industry practices can protect your network and customers from greedy grinches:

  • Comply with all data security laws and ensure employees are trained on proper measures to protect sensitive data.
  • Have layered security protocols in place for online banking.
  • Regularly monitor IT systems for security violations and unwanted intrusions, and perform periodic audits for potential vulnerabilities.
  • Offer customers mobile banking security alerts so they can receive text alerts and emails when there is unusual activity on their account.
  • Remind customers to guard against phishing emails that request sensitive (account information, passwords) and non-financial information (DOB, name, address, etc.).
  • Require online and mobile banking customers to use strong passwords and to change them frequently.
  • Encourage customers to check their bank and credit card accounts often to catch and report unauthorized transactions immediately.
  • During the holidays, skimmers take advantage of shoppers frequenting ATMs more often. Designate staff members to check ATMs regularly for skimmers, and educate customers to be awareof their surroundings, and check ATMs and POS terminals before entering or swiping their cards.

During this most wonderful time of the year, don’t let the Grinch steal your holiday spirit or your customers’ holiday cash.


Article written by Teri Wesley. Originally appeared in Bankers’ Hotline Vol. 27, No. 11


Leave a Reply

Your email address will not be published. Required fields are marked *