Fraud Risk Management 101

MAIN TYPE OF FRAUD THAT AFFECT COMPANIES
• Account take-over - where a fraudster collects sufficient information about the victim to dupe the victim’s financial institution that they are the customer

HOW IS THE ID OBTAINED / USED
• Personal Theft / Social Engineering / Internet / Business Theft / Lost
• Information on Company Directors obtained via Companies House
• Instances of insider infiltration – obtaining information to be used in fraud
• Fraudster has sufficient information to pretend to be customer and uses it
• May obtain further information, assess how to defraud institution / individual
• Use of telephone, or in writing, or use of internet (email)

FRAUD WARNING SIGNS / INDICATORS
• Change of address / bank made by phone call and/or letter – alteration to letters / forms
• Unnecessary / excessive details provided in communications
• Numerous phone calls received (e.g. via a mobile phone)
• Recent change of address then followed by change of bank account details
• Change of address from ‘affluent’ areas (& large distances i.e. north to south) to less affluent
• Usually request payment made by electronic transfer / TT
• Documents often faxed through (greater use of email)
• Overseas payments (high risk countries including South Africa)

WHAT CAN COMPANIES DO TO PREVENT FRAUD ( PROCEDURES AND CONTROLS)
• Additional ID requirements / verification where a COA
• Warning markers / call and address monitoring
• Intelligence sharing
• Internal Systems and Controls including:-
• Transaction Monitoring
• Staff Monitoring
• Client notification – Change of address and bank letters
• Enhanced ID&V
• Suspicious address and phone no detection / monitoring
• Review of unnecessary details in correspondence
• Use of electronic verification such as Call Credit checks

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