Republished from CU Times dated February 18, 2021. By James McCabe.
As if 2020 wasn’t bad enough, we have entered 2021 with another looming danger that continues to expand and wreak havoc in your members’ lives. I call it the “cyber-demic,” a cyber-warfare that’s spreading like we haven’t seen before, caused by hackers who are leveraging COVID-19 to steal, sell and damage your members’ identities. Even more unsettling is that unlike the pandemic, there’s no vaccine to slow down these attacks that are rapidly spreading and will continue to haunt individuals and businesses alike.
A detailed article from TechRepublic about the 2021 Experian Data Breach forecast painted a grim picture of what’s yet to come:
What is your credit union doing to support your members in the midst of these 2021 predictions? Your members face significant risks on several fronts, and attacks can strike without any warning.
As COVID-19 continues to headline the news, the vaccine rollout will present opportunities for criminals to prey on the fear, confusion and misinformation that your members are confronting. The advent of contract tracing organizations is creating new avenues for criminals to steal your members’ personal health information (PHI) – for example, thieves may pretend to be contract tracers to maximize the amount of information they can steal. Health records continue to be the most valuable data to resell on the black market, a trend that opens your members up to vicious attacks of all kinds.
With COVID-19 protocols requiring more and more of your members to set up work-from-home environments, along with the evolution of the 5G network, cyber-hackers have numerous opportunities to attack. These technological hacking geniuses know all the vulnerabilities of home networking. The extensive connectivity of 5G technology makes your members more vulnerable to being caught off guard. According to the 2021 Experian Data Breach Industry Forecast, with the technological control of a house’s security and other devices, criminals will more regularly hold a household hostage in exchange for money, valuable information or just for the potential fame.
Add to all of this the fundamental uncertainty of day-to-day restrictions and potential new mandates on the public, and it is easy to understand why your members are wondering how to best protect their lives, families and assets. Credit unions have always demonstrated their ability to step forward and provide sound financial advice and guidance in uncertain times. And now, more than ever, members need extra support and guidance from their credit union.
Have you considered new ways to protect members outside the walls of your credit union with new services that could include ID theft and fraud recovery, and robust protective monitoring? This monitoring could include Dark Web monitoring to alert members when their non-financial data (i.e. PHI) is being attacked or used against them. You could also offer members mobile phone protection and perhaps some well-positioned discount programs to save them money. These kinds of services are available, and several components can extend to their whole family. Bringing these enhanced services goes a long way to increase member engagement and generate non-interest income, and it’s something hundreds of credit unions are doing today.
Cybersecurity preparedness has been a mantra of the NCUA for over seven years. Yes, the vulnerabilities of data breaches are ever-present for credit unions, and fraud is getting worse all the time. But the “front-line” targets beyond the credit union are your members, and they require serious help. Why not heed the cyber-demic warnings of the 2021 Experian Data Breach Industry Forecast and do what other financial institutions aren’t doing – bring more protection and guidance to members to expand their faith and trust in their faithful credit union?
As if the COVID-19 pandemic and its ramifications haven't given members enough to worry about, it is now the time of year when criminals also focus on tax fraud, and they're using several schemes to attack your members.
Many members are not aware of just how easy it can be for criminals to submit a false tax return to the IRS in their name, using their personal information. Thieves are using personal information that has been collected and stolen from various data breaches and sold over the years on the Dark Web. In 2020 alone, according to a newly released 2021 report by Risk Based Security, the volume of records comprised of recorded data breach events in 2020 "jumped by 141% to a whopping 37 billion records", the largest number seen since 2005.
On the false return, the thieves make it appear as though there is a significant refund owed and in the member's name, using their social security number, claim that refund for themselves. And then they vanish, leaving your members with the clean-up process, which requires hours of paperwork and waiting to correct the situation so that their "real" federal tax return to be submitted. It often takes months or longer to get resolved so that the member can receive their money.
Unfortunately, most tax fraud victims (your members) don't realize that they've been attacked until they go to submit their own tax returns and have it rejected because the criminals beat them to it.
Cyber-thieves are also using your members' personal information to submit fraudulent unemployment insurance claims, which means, according to KrebsOnSecurity, many members are likely to be told they owe significantly more in taxes than they actually do. Scammers use stolen data to complete the false claims for benefits and then have the funds deposited into an online account under their control.
Now seems like the perfect opportunity for your credit union to take some positive action to help your members defend themselves. You might want to consider what hundreds of other credit unions are doing. Providing members with ID Theft Protective services that go far beyond anything they could find on their own…..and these services prove to create greater member engagement and strong, residual, non-interest income. These ID Theft Protective services defend your members from all fraudulent attacks that could devastate their livelihood.
With COVID-19, natural disasters, and other challenges affecting nearly all of us, now is an opportune time for credit unions to bring a positive message of support and protection to members. It only makes sense that members want the credit union that they trust with their finances to protect their identity as well.
Jim McCabe, Senior Vice President, Identity Theft Services at Vero.