'The New Normal': Fraudster paradise, insurer nightmare
Fighting fraud in the call center can be particularly challenging for property and casualty insurance providers.
In March, the abrupt shift to remote living caused chaos for businesses and consumers alike, with many turning to computers and other devices for work, school, socializing and even grocery shopping.
Throughout this chaos, many consumers failed to put in place the proper security measures to protect their new remote life. In fact, according to a recent Pindrop survey, 70% of consumers did not even take basic precautions like varying their passwords across different accounts, leaving them vulnerable to phishing and other attacks.
While consumers were throwing caution to the wind with their cybersecurity habits, contact centers were experiencing record call volumes, spiking as high as 1000% from normal levels as the virus peaked. With insurance call centers typically working quickly to keep customers happy and pay out insurance claims, call volumes of this magnitude would create disarray at any time. But the COVID-19 pandemic environment, in particular, is welcoming to opportunistic fraudsters to take advantage of unsuspecting consumers.
Fraud in the call center
Fighting fraud in the call center can be particularly challenging for property and casualty insurance providers, which typically have separate call centers for sales, servicing, claims and specific types on insurance. As a result, it can be difficult for insurers to recognize and coordinate fraud response efforts. Fraudsters know this and take advantage by attacking from every direction.
According to Pindrop research, around 1 in every 5,600 calls into a P&C contact center is fraudulent. This is a lot when you consider that the average call center takes in around 60 million customer calls per year. In fact, across all industries, Pindrop estimates that about 90 voice channel attacks occur every single minute, but this has risen substantially during COVID-19. This can amount to a huge sum of money lost in fraudulent claims. That’s why it is important to understand the types of fraud plaguing the insurance industry and take steps to detect and mitigate fraud attempts before it is too late.
Fraudsters: Smart and savvy
There are several common types of fraud bad actors use to target property and casualty insurance call centers. One common method is using a stolen or synthetic identity. In this scenario, fraudsters steal an identity or create a fake identity to open an account with an insurer and make fraudulent claims, collecting thousands of dollars for a person who may not even exist.
Another common method is “Dec Diving,” or policy declaration diving. In this attack, fraudsters call in pretending to be one of the insurer’s policyholders and ask for their policy declaration, which contains personal information about the policyholder, such as their name, addresses, and any mortgages they might have. All of the information accessed via these methods can then be used for the fraudster to reach their ultimate goal — account takeover.
In an account takeover, a fraudster gathers enough information about a policyholder to fool a call center agent into handing over the account to them, or hack the policyholder’s online account to change the policyholder’s information to their own. The fraudster then routes the policyholder’s account to their own fraudulent addresses, phone numbers, and email addresses, and can then add new cars or drivers to the account to make claims on. Recently, fraudsters have even been renting cars, taking out policies from multiple insurance companies on them, and then crashing the vehicle so that they can collect money from multiple claims on the same car.
A needle in a haystack
With so many avenues for fraud, it is easy to see how fraudsters take advantage of insurance providers. But fraudsters can be outsmarted. In all of these fraud scenarios, the fraudster’s activity is carried out before a claim is paid, so stopping them is as easy as identifying and flagging potential fraud before a claim has been paid. Sounds simple, right?
If it were really that simple, there wouldn’t be fraud. But there are steps and tools you can use that really do make it that simple. The first step to mitigating fraud is educating yourself and any call center agents about common types of fraud to look out for. If a caller seems suspicious, or is phishing around for information, there is a chance they are a fraudster. Additionally, by employing anti-fraud technologies like voice biometrics or authentication, you can greatly improve your fraud recognition capabilities, ensuring agents don’t hand over any sensitive information or money to a fraudster.
Even once our world returns to normal, fraud will be here to stay. By understanding fraudsters’ techniques and utilizing the right technology, you can ensure your contact center is protected in any situation.
Mark Horne (mhorne@pindrop.com) is chief marketing officer of the information security company Pindrop. He is a holistic marketing executive with a proven career record of driving strategic development and operational execution of transformational, customer-centric initiatives that impact and support organizations’ mission and growth objectives.
These opinions are the author’s own.
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