Is Your Customer Service Center a Direct Line to Fraud?

Giving your customers easy access to helpful customer service agents is a key to cultivating loyalty and earning higher customer lifetime value. Unfortunately, the elements of a good call center experience for customers are also easy for fraudsters to exploit. That can lead to account takeovers that cause financial losses, break customer trust, and erode brand reputations. Although phishing emails and stolen passwords might be more common ways to break into customer accounts, criminal attacks on call centers are increasing, and so is the number of U.S. adults who've been victims of account takeover.

A 2024 report by TransUnion states that 4.5 percent of all calls into U.S. call centers in 2023 were high risk, meaning likely to be fraud. That's up 55 percent from 2022. One third of organizations surveyed by TransUnion for the report agreed that account takeover starts in the call center.

In a 2023 survey by Security.org, 29 percent of American adults said they'd experienced at least one account takeover, up from 22 percent in 2021. Many of those victims suffered additional consequences, including identity theft and takeovers of additional accounts that used the same login credentials. Social media and financial accounts were the most commonly taken over accounts in the Security.com study, although e-commerce account takeovers are on the rise. The survey found that while e-commerce accounted for just 8 percent of all account takeovers in 2021, it represented 17 percent in 2023, as criminals catch on to the fact that many of these accounts contain payment data.

At the same time, easy customer service experiences are important factors in consumers' shopping decisions. ClearSale's most recent survey of consumer attitudes about e-commerce, fraud, and customer experience found that 31 percent of North American shoppers list great customer service as a reason that they shop online rather than in stores. Negative experiences with customer service have an even bigger impact: 72 percent say they won't shop on a site again after a bad customer service experience there. So the challenge for businesses, particularly retail and e-commerce, is to stop fraud without blocking customers' access to help.

Why fraudsters are phoning it in

Call centers make appealing targets for criminals for several reasons. The first is easy access. All fraudsters have to do to reach an actual person is dial in and navigate a phone menu. If they have enough stolen or scraped data about their target customers and some skill at verbal manipulation, they can often get agents to reset passwords or otherwise help them regain access to accounts.

The nature of call centers also creates an environment where criminals can con their way into customer accounts. Because the focus is on helping customers, agents are already in the mindset of wanting to solve customers' problems. So, when a customer calls in needing a password reset code but they've also lost their phone, the representative's first impulse might be to find a workaround rather than to flag the call as potential fraud.

Time pressure is a known factor in getting people to fall for scams. That's why gift card email scammers often impersonate a boss who needs employees to rush out to buy gift cards for last-minute client gifts. But in call centers, the time pressure comes from within, as agents are encouraged to handle each call as quickly and efficiently as possible. That can leave little time or incentive to think about whether a particular customer request might be a setup for fraud.

Other forms of pressure come from the fact that 63 percent of call centers aren't fully staffed, so each agent is obligated to handle more calls to manage the overall volume. Additionally, agents are not normally highly trained in how to detect fraud, and many believe that a person calling in to a call center must be legitimate, since that person is going out of their way to call in. Fraudsters have become much more aggressive with their tactics these days.

Cutting off call center fraud attempts

Identifying and preventing account takeover attempts is possible, but it needs to be done in a way that doesn't overwhelm busy agents or create frustration for real customers. A good place to start is with data you have on past fraud attempts or successful fraud attacks on your customer service team. Those benchmark numbers can help you track your progress and monitor trends in fraud attacks against your call center.

If your data is categorized by channel, you might be able to pinpoint the way fraudsters are most likely to contact your team, and then set up extra precautions when dealing with customer contacts via those channels. For example, the TransUnion report found that 61 percent of high-risk calls into bank call centers in 2022 came from non-fixed voice over Internet Protocol (VoIP) numbers, despite that channel representing only 3 percent of all calls.

How should you handle high-risk calls? Because it's hard to change human nature, it might be wisest to focus on technology and processes that can analyze calls for fraud rather than expecting agents to develop and use anti-fraud expertise while also doing their primary jobs. A combination of artificial intelligence and biometric data can analyze calls in real time to compare the caller's voice to past voice data associated with the customer's name and to check for phone number spoofing.

When an analysis raises a flag for high risk, the system can require additional verification steps like two-factor authentication and requests for personally identifiable information to weed out fraudsters. Focusing only on the high-risk calls for extra verification allows most calls to proceed without added friction for legitimate customers. This process also lifts the responsibility for detecting fraud off agents so they're free to focus on meeting customer needs.

Account takeover fraud is a lucrative business for criminals, and fraudsters will try to exploit any pathway they can. Investing in technology to vet incoming callers can protect your business from fraud-related losses and keep delivering great customer service.

Original article at: https://www.smartcustomerservice.com/Columns/Vendor-Views/Is-Your-Customer-Service-Center-a-Direct-Line-to-Fraud-165493.aspx