Fraud is big business: according to the Federal Trade Commission, in 2023, consumers lost over $10 billion to fraud, and about $2.7 billion was due to imposter scams alone. That makes it critical for all of us to protect our personal information.
There is a vast array of possible fraud and scams, and Salal’s Business Banking Representative, Ken Minoza, has seen it all. “Members have reported stolen names, dates of birth, addresses, social security numbers, and a host of other sensitive data,” Ken relayed. “Sometimes our members will leave checks in their car, and a thief strolls along and smashes the window, or sometimes a disgruntled former business employee will use their access for nefarious reasons.”
However, the most common scenario that our Business Services team sees involves compromised email accounts. “There has been a noticeable uptick in member-reported breaches of personal and business emails,” Ken said. “In many cases, fraudsters compromise a third-party vendor’s email, giving them access to our members’ email addresses. Sometimes, the thieves will go so far as to impersonate vendors, tricking members into redirecting funds to fraudulent accounts.”
Salal’s Financial Crimes department agrees that email compromise is the most frequent source of fraud. “This usually takes the form of one of the business member’s client or vendor’s email accounts being compromised or spoofed, such as billgates.com being valid, versus biligates.com being fraud,” said one Salal Fraud Investigator. “The information that the fraudsters need to conduct this activity is generally obtained via phishing emails, fraudulent calls to the business, dumpster diving or mail theft, or simply researching the target companies online.”
However, some identity theft incidents occur in person. “A scammer walked into one of our branches with a counterfeit driver’s license fashioned using our member’s personal information,” Ken shared. “They then headed to another one of our branches to conduct additional fraud,” Ken reported. “Fortunately, the branch manager was able to catch on to their scheme and held onto the counterfeit license and one of the checks to prevent any further loss. We swiftly notified the member about the situation.”
In each case, Salal aims to help prevent fraud at its source. “We have had instances where fraudsters have obtained sensitive information like SSNs, birth dates, and mother’s maiden name, and called Salal customer service to attempt transactions or obtain account information to further a fraud scheme,” elaborated Karen Petrick, Business Banking Due Diligence Manager. “If a fraudster has enough sensitive information, it’s possible that they may attempt to open a checking account or loan, or obtain other banking services, particularly using the internet.”
Fraudulent account activity can result in financial losses for our members and Salal and hurt our member’s credit scores. “Untangling identity theft with the credit bureau agencies is a complicated and long process and can make it difficult to obtain credit accounts in the future,” Karen said. “This is why, when you call Salal, we tend to ask several identifying questions to ensure we are speaking to our member.”
However, when protecting your personal and account information, our members are their best defense, as illustrated by a phishing scam that compromised multiple business emails. “Fraudsters impersonated an account signer, sending emails to multiple members’ organizations requesting payment approval,” Ken shared. “Believing the request was legitimate, one authorized signer approved the payment, sending funds through online banking to a fraudulent account. When the member realized it was fraud, the funds had already been withdrawn from the receiving bank, resulting in a significant loss.”
Salal attempted to recover the funds, but this is not always successful. “We advised the member to file police reports, alert their IT department for a full system sweep, and report the incident to the FBI,” Ken said. “Additionally, we recommended creating new email addresses for all signers and employees as a precaution. This incident served as a reminder of the importance of verifying payment requests and securing email accounts to prevent future attacks.”
As in the example above, Salal prioritizes our response to reported fraud. “Our Business Services team has a well-structured and efficient fraud procedure in place,” Ken said. “We have a tailored protocol for all sorts of fraud scenarios, including wire fraud, online account takeovers, data breaches, and identity theft.”
Once fraud has been confirmed to have occurred, Salal takes immediate steps. “If the account number is compromised, we place a restriction on the affected account,” Ken explained. “For debit and credit card fraud, we immediately block the suspicious cards and file a fraud dispute on behalf of the member for any unauthorized transactions.”
We also provide recommendations for safeguarding members’ accounts. “We offer Positive Pay, a fraud prevention tool that allows members to monitor ACH and check transactions and return unauthorized payments,” Ken said. “Alternatively, we may close the compromised account and open a new one to protect ongoing integrity.”
But prevention is better. So, our Financial Crimes team recently outlined a variety of ways to help protect your personal information:
- Create strong passwords.
- Have up-to-date virus protection.
- Limit the sharing of personal information on business websites and social media.
- Train employees to spot phishing attempts.
- Always verify any communication received is coming from an existing and trusted source, especially by carefully checking email addresses for spoofs or misspellings.
- Implement a multi-factor authentication process for any vendor information changes. For example, call the vendor at a trusted phone number or communicate face-to-face to verify the requested changes.
- Remember that “Urgency” almost always means “Fraud.” If a payment request demands immediate action, it is most likely a fraudulent transaction.
In addition to keeping your personal information safe, please store your account documents securely. Twelve months of account statements are available in your online banking. Now is a great time to download any statements from 2024 that you haven’t already saved and ensure that those documents are housed in a locked area with restricted access.
We’re Here to Help
Do you have any questions about protecting your personal or account information? Please reach out to the Salal Business Services team at 206.298.9398 or BusinessServices@SalalCU.org.
