The Financial Crimes Enforcement Network is seeing “a high amount of fraud” enabled through synthetic identities and account takeovers via nonbank fintech platforms, FinCEN Director Kenneth Blanco said today at an identity protection event in Tampa, Fla.
“In some cases, cyber criminals appear to be using fintech data aggregators and integrators to facilitate account takeovers and fraudulent wires,” he explained. “By using stolen data to create fraudulent accounts on fintech platforms, cybercriminals are able to exploit the platforms’ integration with various financial services to initiate seemingly legitimate financial activity while creating a degree of separation from traditional fraud detection efforts.”
While FinCEN receives about 5,000 account takeover reports each month involving $350 million, Blanco said, “because of diligent work by bank compliance officers” these attempts do not represent actual losses. However, he warned that with billions of compromised credentials exposed online, banks need to remain vigilant to the account takeover threat.
Separately, Blanco added that FinCEN supports a legislative solution to enhance the collection of beneficial ownership data. One such bill is the bipartisan, American Bankers Association-backed H.R. 2513, which would require corporations and LLCs to self-report beneficial owners to FinCEN when they are formed. H.R. 2513 cleared the House Financial Services Committee in June.