By Walt Williams
Like many banks, the Nebraska-based Security National Bank has a customer service line that takes complaints and questions, and that line is often at the forefront of the bank’s efforts to protect its customers from fraud and scams. Lindsay Lindmier, VP and director of financial crimes at Security National, works with the bank’s compliance officer to monitor the complaint line for potential fraud.
Some scams are easier to tease out than others, Lindmier says. For instance, the bank sometimes gets calls from customers saying they were contacted by bank representatives with hard-to-understand foreign accents.
“We’re in the Midwest and since we don’t outsource, that would be a red flag for us,” Lindmier says. “We’d look further into that and contact our customer and make sure that they didn’t provide any information” to the caller.
Not all fraud is so easy to spot. Scams are growing increasingly sophisticated and the tactics used by scammers are always evolving.
Frontline staff are often the first line of defense for banks, but communications barriers and a general lack of awareness about warning signs mean consumer complaints suggesting fraud may not reach the people who monitor such things.
Solutions to the problem include fraud training, having a clear process for escalating suspicious complaints, and removing obstacles to communications between frontline and risk and compliance staff, according to bankers and risk experts.
Security National Bank is a smaller bank, so Lindmier — who spoke during a panel on monitoring customer calls during last year’s ABA/ABA Financial Crimes Enforcement Conference — says its size allows her more direct connections with other departments than at larger institutions. Still, her team puts in the extra effort to be visible to frontline employees. Team members attend the bank’s branch delivery division meetings, where they spend five to 10 minutes updating call center staff and others on the latest developments and trends in fraud and scams.
“They have one at least every two weeks, and we tell them, ‘This is what we are seeing. This is what we need you to send to us in addition to everything we told you last time we met, add this to the list,’” Lindmier says.
Fraud “evolves so quickly,” she adds. “The typologies change and the red flags change. The best way we can do it is rather than sending emails — because we all know that inboxes get flooded — is standing in front of them and letting them know what we’re seeing.”
Fraud hotline
New Jersey-based Valley National Bank also emphasizes in-person interactions when it comes to keeping everyone up to speed about the latest developments in fraud, according to Richard Vitale, SVP and assistant director of fraud risk management, who also spoke during the panel.
“You have to get face-to-face with the business lines and convince them that the fraud team is an asset and an ally, that you can save them money,” he says.
The bigger problem for Vitale’s team can sometimes be too much communication, with team members flooded with requests to investigate customer complaints suggesting potential fraud.
As a result, he has worked to standardize the process, establishing a single email address for staff to contact the bank’s fraud team for follow-up on investigation requests. The team also set up an internal hotline and created an intranet-based fraud referral form that allows any bank associate to submit a report about suspected or confirmed fraud.
“We put a lot of data and a lot of time into what’s on our intranet page so that it becomes an element of self-service: Knowing what the hottest trends are and what are the latest forms you need to submit,” he says.
Keeping up with trends is important because frontline staff not only deal with customers who are getting scammed, but scammers posing as customers so they can exploit staff training to access sensitive information. Frontline staff are pre-programmed to provide a good customer experience, “and the fraudsters know that, so they’ll leverage it,” Vitale says.
He recounts one attempted scam in which a person posing as a customer said they had lost their account password and needed it right away because their dog was locked in a car. “In hindsight, what does your banking password have to do with this dog being locked in a car?” Vitale says. “It’s part of this five-minute conversation of doing anything they can to get a piece of information, scratch it down, and then we’ll hear the exact same person call again five minutes later.”
Getting to the ‘aha’ moment
Whether it is scams targeting customers or staff, banks should have a formalized escalation process. One compliance officer who asked that his institution not be identified says frontline staff are told to report suspicious activity to their managers, who will report any incident they can’t resolve to the operations team in their market. That team will then forward it to the bank’s fraud team.
“We have a very strong process that says this is what you should do,” the officer says. “And the tellers know they will not get in trouble for having to ask another question” of the customer.
In fact, the bank rewards tellers who identify fraud by recognizing them by name in reports to the bank’s board of directors. “The board sees that report and sees these are the individuals, these are the markets, that are saving money for our customers or saving money for the bank,” the officer says.
Whatever escalation process a bank has established, customer communication is important. Candler Eve, director of enterprise fraud risk management at MidFirst Bank in Oklahoma City, says slow response times and lack of customer follow-up can lead to repeat scams.
“We tend to be pretty aggressive with these,” Eve says. “My fraud investigators will call those people who are potentially scammed to ensure that they’re aware that this is a scam and try to go over the seriousness of it.
“If we don’t touch base, then they’re going to come back and get scammed again,” he adds. “No fraudster says, ‘You know what? I scammed this person. I think we’re good.’ That does not happen.”
MidFirst also doesn’t wait for the scams to happen. It has engaged in a number of public outreach efforts to educate the public about the threat. Eve has given several radio interviews about fraud targeting seniors, for example.
“We’re hoping that with every person who has that ‘aha’ moment, they are then telling their friends,” he says.
Frontline staff are often the first line of defense for banks, but communications barriers and a general lack of awareness about warning signs mean consumer complaints suggesting fraud may not reach the people who monitor such things.
Training and resources
Frontline staff have many roles — from customer service to processing transactions — and that can make it difficult for them to focus solely on fraud detection and reporting, says Julie Gliha, VP for compliance at the Iowa Bankers Association. A strategy she recommends is for banks to have clear guidelines for staff on what constitutes a complaint versus a customer service request as there can be very different paths for escalation.
“You want to give them definitions and examples of what would fall in each, and sometimes they do overlap. Having a defined complaint program is really important for the front line to ensure the right process is followed as quickly as possible,” Gliha said.
One struggle for banks is that staff turnover is greatest on the frontline, so training is a continuous education process. Gliha suggests creating resources such as videos and checklists that staff can easily access and reference to quickly identify and respond to fraud. But given how busy frontline staff are, she says that an in-person approach may work best, so she advises weekly meetings or short huddles with staff on what they should look out for.
“It is just that kind of connection that I think is needed because, otherwise, it is human nature to fall back into our daily routines,” she says.
Also, Gliha suggests making the threat that fraud poses personal so staff understand what is at stake for customers.
“I’m a compliance geek, right? I can talk to you all day long [on compliance] and in about 30 seconds of time, your eyes are going to glaze over,” she says. “You’re going to say, ‘Give me a checklist and let me know when I need to deal with it.’ But if I can say, ‘Has this ever happened to you? Has it happened to your mother? Your children? Your grandmother?’ I will have your attention.
“Make it real so they are sensitive to it because you can get a little calloused over time: ‘Well, everybody’s fallen victim.’ You can’t do that when you’re face to face with somebody, and it may be their first or 10th time, but it is a very real crisis for them,” she says.
TOOLKIT
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