When low-tech fraud turns into higher business costs

Posted on: November 13th, 2014 by Art Barger

As low-tech as it may seem, telephone scams can lead to big losses in profits and production for today’s businesses. This is why deploying the right authentication tools is important for sustaining optimal business operations and ensuring excellent customer service.

In the article, “Small Business Security: Hackers Dial Up Telephone Fraud,” criminals continue to exploit the gaps between the phone service provider and a business’s security protections. Adam Simpson, CEO of Easy Office Phone, said it’s a concern that’s on the rise.

“The problem has been getting much worse over the past three years.”

Organizations that allow employees to remotely check their voicemails and perform other functions using their PIN codes are particularly vulnerable to crooks, who repeatedly use any number of approaches to crack authorized user’s personal codes over the telephone. Once they’ve unlock the code, they often call premium international phone numbers with high per-minute charges. The charges, of course, end up on the company’s next phone bill.

Georgia-based Foreman Seeley Fountain Architecture found out the hard way. After their phone system was hacked, they were left with a $166,000 phone bill. For many small to mid-size businesses, phone fraud like this can have a significant impact on a company’s finances.

Businesses today need to be careful about the types of fraud prevention and authentication solutions they implement to mitigate their risk and identify customers over the telephone channel. Operating without adequate protection and customer identity tools can leave them susceptible to more sophisticated social engineering schemes.

Traditional methods of knowledge-based authentication (KBA) are particularly vulnerable to social engineering when used alone. Personal information can no longer be the basis for identifying customers. Once in the wrong hands, sensitive customers data can be misused to fool phone systems and call center agents.

A customer-identity tool such as the TRUSTID® Physical Caller Authentication solution doesn’t rely on what the caller knows. Instead, it validates in real-time the precise physical location of the calling device to identify the authenticity of the call before it is answer.

Through what we like to call “pre-call” authentication, financial organizations know what calls can or cannot be trusted while the phone is still ringing. This kind of proactive authentication for all inbound calls not only helps reduce fraud rates, but it also eliminates costly telephone interrogations to provide a more seamless and cost-effective telephone experience for your customers.