The Retro Fraudster: How to Spot the Old-school Tactics Making a Comeback

The Retro Fraudster: How to Spot the Old-school Tactics Making a Comeback

Simon Viney

Cyber Consulting Sector Lead at BAE Systems Applied Intelligence

Views 945

The Retro Fraudster: How to Spot the Old-school Tactics Making a Comeback

25.02.2020 11:15 am

As technological innovation drives new opportunities for fraudsters, digital security counter-measures could inadvertently be encouraging a resurgence of old-school tactics. These criminals know that today’s customers are wise to some of the more common online scams, but may not be aware of legacy techniques. Savvy criminals might operate Ponzi schemes, bounce cheques or even create fake work opportunities, while using tech-based tricks to help their efforts appear more convincing.

From fake cheques to CEO fraud

Cheque fraud is a growing trend in the US, where this is still a relatively common way to pay. We’re seeing a combination of new channels and old-school tactics emerging. With the advent of higher-quality personal printers, for example, it’s much easier to make one’s own cheques, or to copy other customer or cashier cheques. In the UK, innovative banking services allowing customers to send cheques to their lender digitally also provides criminals with a new opportunity. If they’re able to get hold of a photo of a legitimate cheque, it may be possible to edit the image to change the payee or amount details.

Elsewhere, the timeless Ponzi scheme has been updated for the digital age. Traditionally, investors are lured in by promises of high rates of return from sales of a non-existent product or service. Today, digitally assisted marketing and the lure of making easy money have given rise to Ponzi-like cryptocurrency schemes. In December, three men were charged by the US Department of Justice for allegedly defrauding investors out of $722 million, in just such a scam.

Fraudulent job adverts are also on the rise, luring ‘successful’ applicants into paying money up-front for equipment or tricking them into acting as money mules. In addition, we continue to see executive scams, such as invoice hacks  — also known as “CEO fraud” or “whaling”. Here, a fraudster uses social engineering techniques via email to persuade an accounts department to send a payment outside the company, to an account under their control.

Occasional large value scams in this space generate headlines, such as the tens of millions lost by Toshiba ($37m) and Nikkei ($29m) last year. But many of these payments are for small sums, allowing them to slip under the radar. According to the FBI, business email compromise (BEC) of this sort incurred losses of $1.3 billion in 2018, nearly half of total cybercrime reported to the bureau that year.

Time for vigilance

While young people are better prepared to spot digital scams, they might still fall for these “retro-crimes”. A millennial employee might be quick to delete an obvious phishing email, for example, but they wouldn’t even consider someone going to the trouble of creating a counterfeit cheque.

Knowing the customer is crucial if banks want to successfully tackle this growing trend. This will require greater vigilance in monitoring particular customer groups and seemingly anomalous payments. By contextualising those payments with an individual customer’s payment history and what you know about the payee, suspicious patterns could emerge. For example, excessive payments from the over-55 segment should raise a red flag, as should a set of sudden payments by different customers to the same payee.

The good news is that a leading pack of banks are already stepping up to do more to help their customers. The Bank of Montreal, for example, recently launched its own financial crimes unit to improve customer outreach. But both banks and their customers need to be alert to the range of techniques at the disposal of the modern fraudster.

Sometimes it’s the simplest things that end up catching us out.

 

Latest blogs

Granville Turner Turner Little

The Lockdown Money Revolution

Many Brits have found that lockdown has been beneficial for their money, having cut back on personal spending and managing to put away some extra cash. According to eToro, Brits with unspent discretionary income are set to accumulate £75.5bn in Read more »

Sandra Higgins Sysnet Global Solutions

Are You ‘Prescribing’ the Right Security Solution to Your Merchants?

When it comes to leading a healthy lifestyle, eating the right food, taking regular exercise, and maintaining a positive mindset are key. However, despite these best intentions and practices, you still might not get all the nutrients your body needs Read more »

Robert Flowers DivideBuy

It Doesn’t Have to Be the End – How Retailers Can Grow in Light of COVID-19

It’s no news that the retail industry has been flipped on its head by the COVID-19 pandemic. Due to the lockdown, most in-store operations have been shut down, and nationwide furloughs, reduced pay and steady streams of income at risk have fuelled a Read more »

n/a n/a

4 Ways to Protect Your Small Business Against Cyber Attacks

Just because you are running a small scale business doesn’t mean you are beyond the reach of hackers and attackers. Many small businesses have this thought, which is why they do not invest in their cybersecurity. Unfortunately, every year small Read more »

Kirston Winters MarkitSERV, IHS Markit

IBOR transition update: €STR grabs a foothold?

In the latest development in the IBOR transition, on the weekend of July 25th, we saw the major CCPs perform the much-anticipated Euro discounting and price alignment transition from using EONIA to EuroSTR (a.k.a. €STR) for all Euro OTC interest Read more »

Related Blogs

Dmytro Volkov CEX.IO

Security Basics: 5 Signs of Phishing

A recent WatchGuard Technologies survey showed that 86% of UK companies expect an increase in cyberattacks in the next 12 months. One big threat in particular is phishing attacks linked to COVID-19, which have recently been gaining popularity among Read more »

Fraser King Vodafone Business

Protecting the End-user at All Costs: How to Stop Cyber Fraud on Mobile

In an age of large-scale data breaches and advanced social engineering tactics, it’s clear that the fight against cybercrime never stops. This has only been amplified by the coronavirus pandemic, which has provided fertile ground for cybercriminals Read more »

Tom Kellermann VMware Carbon Black

Modern Bank Heist: from smash and grab to hostage situation as cyberthieves evolve

The financial sector is historically one of the most secure industries in the world. It needs to earn trust and convince customers that their hard-earned money is safe. Nevertheless, the fact that banks are guardians of the one thing cyber criminals Read more »

Mikkel Stegmann Fingerprints

Convenience + Security: The Maths of Multi-Modal Authentication

For today’s efficiency-loving consumers, convenience is more important than ever. When it comes to unlocking our smartphones, for example, the hassle of having to remember PINs and passwords has been long discarded in favour of quick and easy Read more »

James Richardson Bottomline Technologies

Payment Protection for the Modern Age

Modern cybersecurity professionals have succumbed to an arms race with criminals as corporate defence spends balloon, attempting to keep pace with ever-evolving infiltration and extraction techniques. As expenses grow, dangers continue to mount. In Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel