Call Center Fraud on the Rise

At a time when commerce is increasingly conducted digitally, consumers still expect call centers to deliver timely and trustworthy customer service when they need it. However, a new TransUnion report finds that call centers have increasingly become a target for fraud, leading to a complicated balancing act of delivering efficient service and maintaining customer account security.

The survey found that more than half of respondents say that fraud attacks on call centers are on the rise. Financial industry respondents reported an even more acute increase, with a full 90 percent noticing at least some observable growth in attacks. Eighty percent said attacks were up more than 10 percent since 2021, and 20 percent have seen increases of 80 percent since 2021.

"Through the use of tactics, such as spoofed phone numbers and social engineering, combined with personal information obtained from identity theft scams and data breaches, fraudsters have become more focused on call centers as a target to access and take over accounts," said Lance Hood, senior director of omnichannel authentication at TransUnion. "More than ever, it's critically important for call centers to find effective and efficient ways to separate legitimate callers from potentially fraudulent, high-risk ones in a way that reduces friction for the consumer."

The report also found 60 percent of financial industry respondents indicated that most account takeovers start in the call center, up from 24 percent in 2021.  In 2021, the majority of fraud attacks were seen in the web and mobile channels, at 32 percent each. Those channels dropped to 10 percent each in 2022.

Because identity fraud in financial services, such as account takeover or synthetic identities, results in direct financial crime, the financial industry has an even more pronounced incentive to guard against fraud in call centers.

Ninety percent of financial services call center leaders expect new technologies for fraud detection to be seamless or invisible for customers when calling. Seventy percent also believe these technologies must provide authentication accuracy, and 80 percent believe these technologies should support the authentication of legitimate callers and detect risky callers.

The report highlighted the need to stop fraudsters before they can reach and socially engineer contact center agents or probe vulnerabilities within interactive voice response (IVR) systems. Nearly two-thirds of financial industry respondents and 70 percent of survey respondents overall would like authentication to begin before any agent interaction occurs. For example, the use of technologies that will match unknown callers to the client CRM can ultimately reduce the need for further agent authentication. Another example of this technology in action could be found in a pre-answer risk assessment, which can help better determine if a call is being spoofed or virtualized, the most common techniques used by fraudsters when calling into a call center.

Nearly three-quarters (70 percent) of financial firms reported increased use of call spoofing into the call center. All industry respondents also saw an increase, according to 47percent of respondents. Virtual calls are also a problem, with 60 percent of financial firms and 56 percent of all industry respondents reporting increased activity.

"The implementation of end-to-end call inspection authentication enhancements by call center organizations...can help in the delivery of more secure and efficient experiences while protecting the call center," Hood said. "Identifying potential fraudsters before they have a chance to connect with a call center agent reduces risk, allows for the agents to spend more time helping customers and less time verifying a caller is legitimate, and also allows more of an organization's fraud-fighting resources to be targeted to those calls that are truly risky."