The Field Report with Tom Field

The Faces of Fraud 2010

The Faces of Fraud 2010

Well, I'd say there was a competing theme, and it's emerging as the storyline of 2010: Fraud, fraud, fraud.

Just look at some of our recent headlines:

Payment cards, ACH, ATM - these are the forms of fraud that have made the biggest news so far in 2010. But there's another variation preying upon banking institutions, too, and it deserves its own headlines. 

Heartland Hacker Sentenced to 20 Years -- You can't exactly say the Heartland Payment Systems data breach has come to a close (fraud attempts continue to be discovered), but the sentencing of hacking mastermind Albert Gonzalez certainly is the end of a significant chapter of this winding story. He is the poster child of payment card fraud.

PlainsCapital/Hillary Court Date Set -- At first this seemed like a novelty case. A bank suing its customer - what's that all about? But now clearly this complicated case is shaping up as a major statement about ACH fraud and how banking institutions and their business customers need to team up to prevent it.

Ohio Skimming Scam Nets $50K -- Lord, does a week go by without yet another story about ATM fraud being perpetrated against institutions and their customers? It's like skimming today is what mugging used to be - the low-rent crime of choice. Except an ATM can't mace its assailant.

Payment cards, ACH, ATM - these are the forms of fraud that have made the biggest news so far in 2010. But there's another variation preying upon banking institutions, too, and it deserves its own headlines.

Let's talk about first party fraud - frequently mortgage fraud - in which individuals misrepresent themselves or their finances in order to secure a loan or credit they have no intention or means to repay. No one can say for sure how common these crimes are, as they often go unreported. Many institutions simply write off first party fraud as bad loans.

But particularly in the aftermath of the global recession, first party fraud is a significant threat, preying upon cash-depleted institutions that are now especially vulnerable.

I've had some recent conversations with fraud experts conversant in the topic. The first is with Mike Urban of FICO, discussing global fraud trends. Urban knows the fraud landscape as well as anybody, and he sees the impact of first party fraud. My other conversation is with Leigh Williams, BITS President, talking very specifically about mortgage fraud and how institutions and consumers alike can help stop the scams. In fact, BITS has just released a new booklet on the topic, and you should listen to the Williams interview to learn more.

It's been enlightening for me to hear about these schemes, and we'll be sharing more about first party fraud on our sites going forward. I've got some interviews lined up that should offer valuable tips for banking/security leaders looking to stop fraudsters in their tracks.

Meanwhile, let me say: I'll be discussing banking fraud in depth at the upcoming FICO World event in Miami on April 13-16. The aforementioned Urban will be there, of course, and I'll be speaking on Thurs., April 15. If you're at the event, please seek me out and say hello.

I hate to say it, but when it comes to fraud ... we have much to discuss.



About the Author

Tom Field

Tom Field

Senior Vice President, Editorial, ISMG

Field is responsible for all of ISMG's 28 global media properties and its team of journalists. He also helped to develop and lead ISMG's award-winning summit series that has brought together security practitioners and industry influencers from around the world, as well as ISMG's series of exclusive executive roundtables.




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