The short answer—absolutely.
Call center fraud attempts are more popular today than ever. Every call center should take precautions to prevent scammer attacks.
Incorporating fraud prevention strategies like knowledge-based and two-factor authentication is a good start. You also want to make sure you’re prioritizing your first line of defense: your agents. Make sure you have a plan for ongoing fraud prevention education, and ensure system access is tied to their knowledge and experience.
Types of Call Center Fraud You Should Prepare For
Call center fraud comes in many shapes and sizes, but no matter its form, it all has a similar goal—financial gain. Whether it’s stealing a customer’s personal data, gaining account access to drain funds, or stealing products or services from a business, fraud is real and relentless.
Understanding the most common types will help you plan for and mitigate it.
Account Takeover
The scammer’s goal here is to trick an unsuspecting call center agent into granting the scammer full access to a customer account. They do it by providing a few pieces of personally identifying information (PII) for a customer.
This is typically things like the customer’s name, social security number, and date of birth. The scammer likely stole this PII in a data breach elsewhere, got it through phishing attempts, or purchased the information on the dark web.
Once the agent grants full account access to the scammer, the scammer quickly changes login credentials and locks the real account owner out. Then they do a range of things, from accessing even more sensitive information like credit card details to placing fraudulent orders to transferring funds to third-party accounts.
Account takeovers enrich the scammer and hit the customer’s finances hard. For the businesses responsible for granting account access, liability and reputation are on the line. Well-trained call center agents are the first line of defense against account takeovers.
Identity Theft
A tried-and-true strategy, identity theft is a scammer favorite. How it works is that scammers steal personal information via a variety of means. Hacking personal devices like phones, tablets, and laptops, stealing ID cards, and breaching a Wi-Fi network to extract unencrypted data are just a few tactics used.
Scammers want this information for a few reasons. Once they gain access to a user’s personal account, they can drain bank accounts, rack up credit card charges, etc.
They can also use the information to apply for loans and open credit accounts. This is a particularly insidious strategy since it isn’t usually detected until an account goes unpaid or a victim happens to check their credit report, usually months later.
Armed with the stolen information, scammers contact the call center and provide the information. Unwary agents may be swayed, causing financial damage to the company and significant strain for the victim of the identity theft.
Card Not Present (CNP) Scams
This popular scamming technique takes advantage of the popularity of online shopping and other digital transactions. In this scenario, the scammer has stolen credit card information (card number, CVV, expiration date) but not the physical card itself.
They contact the call center or place an order online. Since they can provide all the card details, these transactions often get processed without question. This is most often when companies don’t incorporate address verification into their order process.
CNP scams cost businesses billions of dollars each year. This includes loss of products and customer chargebacks related to the fraudulent transactions.
IVR Mining
Many call centers rely on Interactive Voice Response (IVR) systems to streamline agent workloads. Scammers love them, too, but for different reasons.
The typical IVR scam relies on bulk auto dialing technology to try and detect customer PIN and account numbers. The scammers blast a company’s IVR with repeated calls and automated attempts at entering customer information until they get a hit.
Once in, the scammers have free reign to do almost anything. They can order products, seek refunds for “missing” orders, request replacement credit cards, and move on to other scams like account takeover or identity theft.
This type of scam can cost businesses both money and time to resolve the issues. Customers are also impacted with fraudulent credit card charges that must be dealt with. Reputational loss to the company is another risk. One way to mitigate this type of attack is to implement data loss prevention software designed to detect unusual network activity and provide alerts in time to stop the activity.
Customer Impersonation
Customer impersonation is when scammers pose as customers and contact the call center to try and get a refund or replacement. They might complain about defects or claim the order never arrived at all.
Once they convince the agent to honor their request, the scammer will use an address, bank account, or email address that does not match the information on the customer account. This is a red flag that call center agents should be trained to recognize quickly.
This type of scam costs companies in several ways. Reshipped products deplete inventory that would otherwise be ready to sell to another customer. Refunds hit the company’s bottom line right away.
Why Care About Call Center Fraud?
It’s tempting to look the other way or believe fraud doesn’t happen in your call center. You can’t afford to do either. Here are the real costs of call center fraud.
- Financial damages: When call center fraud occurs, businesses lose money via baseless refunds and are on the hook for damages customers incur due to call center negligence.
- Product loss: When a business doesn’t detect call center fraud in real time, it loses inventory which negatively hits the bottom line.
- Reputation loss: Customers lose trust in a company that doesn’t clamp down on call center fraud. If the fraud is big enough or impacts enough customers, the business will get the kind of negative publicity that can tank its reputation.
- Compromised data: Once a scammer gains access to customers’ personal data, it’s nearly impossible to fix the situation. The stolen information quickly gets disseminated to other bad actors, the customer ends up paying the price, and the breached business faces financial and reputational damages.
- Fines and penalties: In some cases, businesses can face regulatory fines when data breaches occur, especially if the call center is deemed negligent for not implementing appropriate fraud prevention strategies like two-factor authentication (2FA) and knowledge based authentication (KBA).
- Business interruption: When fraud is detected, normal operations get dramatically scaled back or stop altogether while remediation efforts get underway. Company resources are redirected, fraud analyst experts often must be brought in, customer support is redirected to customer outreach activities, marketing campaigns are implemented to rebuild trust and reputation, and bottom lines are dramatically impacted.
Strategy 1: Make Two-Factor Authentication Mandatory
What It Looks Like
With Two-Factor Authentication (2FA), a person trying to log in to their account is required to complete a secondary security step before access is granted. That secondary step is usually a code sent via text/email or displayed in a separate authenticator application on their mobile device.
2FA takes only seconds and adds another layer of security to the login process, using tools unique to the user. This strategy makes it difficult for scammers to impersonate the user by only knowing a username and password.
Benefits
This is a relatively easy strategy to implement. It leverages technology to shift the burden for ensuring customers are who they say they are away from the agent, freeing agents up to focus on other elements of customer service.
Having 2FA in place also better protects a business from being accused of negligence in the safeguarding of customer data.
How to Implement
Adding 2FA is best done with the help of a company’s IT department. Determining the best authentication method depends on business models and resources.
Mistakes to Avoid
Failing to incorporate two-factor authentication at all is the biggest mistake a business can make. Not only does it create a less-than-secure customer experience, but it opens the business up to claims of negligence should a breach occur.
Strategy 2: Implement Knowledge-Based Authentication (KBA)
What It Looks Like
This is an authentication method that requires a user to answer security questions before account access is granted. The answers to those security questions are provided by the user when they sign up for the account.
These questions are ones that a scammer would not likely know, like your favorite ice cream flavor or your first pet’s name. The strategy of using knowledge based questions has been around a long time. As scammer strategies evolve, so does the type of questions used for this method of fraud prevention.
Benefits
The responsibility to choose the questions and provide personalized answers falls on the customer during account setup. This makes this strategy a low effort way to enhance account security, without putting a lot of responsibility on the call center.
When it comes time to use it, call center agents simply have to ask the right question and make sure the caller’s answer matches the answer shown to the agent. It makes authentication quick and easy, allowing the agent to process the call quickly and move on to the next.
How to Implement
Once the technology is in place, agents rely on their general interpersonal skills to engage with customers when asking the questions to authenticate an account. Beyond that skill set, agents will require training on how to use the authentication software effectively and what to do if they suspect fraud.
Mistakes to Avoid
Inadequately training agents to recognize suspicious authentication attempts is the main pitfall of this security technique. If agents are not adequately trained, it’s possible they will provide account access to someone other than the actual customer.
Strategy 3: Use Call Source Analytics
What It Looks Like
Using technology to confirm a call’s source and the type of device being used can greatly help combat fraud. Scammers have some known geographic locations, and identifying these at the start of a call can raise the first red flag.
There is also analytics technology to identify the tools that spoof caller ID and probe IVR systems, both tools commonly used by scammers.
Benefits
Identifying common technology-based fraud strategies from the start can help squash those efforts before they lead to bigger issues. Agents aren’t able to identify this easily on their own, so layering in a technology solution makes their jobs easier.
How to Implement
Call source analytics are often one part of call center software tools. Using such software to help run your call center is a smart move. The company IT department can assist with getting this technology up and running. Training agents to use and understand the tools is the next step.
Mistakes to Avoid
Ignoring the data is the biggest thing that can go wrong with this strategy. Agents won’t ignore it intentionally, though. It’s usually a lack of training that causes them to miss the important information generated by analytics tools.
Managers must ensure that all call center staff know how to interpret the data they see, then act on it.
Strategy 4: Manage Agent Access
What It Looks Like
Not every call center agent needs to have unfettered access to all data or system functionality to do their job. Managing access helps ensure that sensitive transactions are handled by appropriately trained and experienced agents.
Each agent’s access should be determined by the call center manager or supervisor, based on the agent’s skill and knowledge. Access should then be assigned in the call center software via the manager’s dashboard. Controlling access in this way helps prevent inexperienced or untrained agents from processing large transactions or making significant account changes.
Benefits
When access is tied to knowledge and experience, call center managers can rest easier knowing the right agents are handling the right calls. Agents also have motivation to keep learning so they can be promoted and take on more responsibilities.
How to Implement
Using call center software makes implementing this strategy a breeze. Once the different levels of agent access are set up, supervisors can begin assigning agents to the correct access level.
Supervisors must make sure agents are aware of the different access levels and understand how to be promoted to each one. Offering the required training to make this happen is necessary.
Mistakes to Avoid
Moving agents to higher levels when they aren’t ready is one thing to avoid. Failing to offer appropriate training opportunities is another.
Call center managers should have a solid strategy for how and when to give agents progressively more responsibility. Then they should offer a clear training path that agents can follow to make it happen.
Strategy 5: Mandate Fraud Prevention Training
What It Looks Like
An untrained call center agent is an easy target for fraud. It’s imperative that every agent is fully educated about types of fraud, warning signs, and prevention strategies.
Every call center should have a robust training program in place that includes an in-depth curriculum on spotting fraud red flags, understanding authentication strategies, and knowing how to deal with fraud attempts.
Benefits
Well-trained agents are adept at spotting fraud attempts and are valuable assets of any call center. They become the first line of defense against scammers.
The more training they receive, the better their observation and analysis skills become. These are important skills that help agents quickly identify fraud before it escalates to a bigger problem.
How to Implement
Call center managers can work with their human resource counterparts to design and roll out fraud training programs for call center agents. Once a plan is in place, call center leadership should be the biggest cheerleaders for agents to complete the training programs. It takes regular and proactive efforts to gain buy-in from agents to complete any training programs.
Mistakes to Avoid
The biggest mistake a call center manager can make with training is thinking it’s a “set and forget” effort. It takes time and energy to create interesting training programs, then motivate agents to do it. It also requires regular follow-up to ensure continued agent buy-in.
Call Center Fraud Prevention: How to Identify Fraud (Immediately)
There are two lines of defense when it comes to identifying fraud. One is live agents, the other is technology.
Agent-based Strategies
In these situations, the agent should be trained to recognize each situation and understand how to escalate or resolve the situation in real-time. These include:
- Caller has trouble answering Knowledge-Based Authentication (KBA) questions
- Caller cannot provide the correct information to complete two-factor authentication (2FA)
- Caller tries to avoid the authentication process altogether and gets angry or hostile when prompted by agent
- Caller asks to speak to a specific agent in an effort to manipulate the agent
- Caller info doesn’t match account records
- Caller wants to change contact information and send products to new address, refund to different bank account, or sensitive information to a different email address
Technology-based Solutions
Leveraging the power of software to identify fraud can be a huge time and resource saver.
- Artificial intelligence uses machine learning algorithms to find patterns, detect anomalies, and flag abnormal activities in the call center. This can identify fraud issues long before even the best agent would notice a red flag.
- Call center software streamlines call center activity and can help detect and mitigate fraud before bigger problems develop. One of our favorites is Nextiva, which offers a full suite of call center functionality that can be customized for each call center’s needs.
- Network activity monitoring software is another solid way to stay on top of unusual call center activity. It keeps an automated eye on all aspects of your technology infrastructure and alerts when suspicious or unusual activity is detected.
Best Practices to Ensure Your Call Center’s Always Ready
Offer Continuous Training
Well-trained agents are very good at identifying fraud and mitigating it before bigger problems arise. Take the time to build a robust agent fraud training program, then ensure every agent completes it.
Creating mandatory training programs gets a lot easier when you use training software. That being said, if you create the best program in the world but agents don’t use it, you may as well not have bothered at all.
Create a Recovery Plan
Having a clearly defined process for what to do if fraud occurs is essential. It should include instructions on what to do when fraud is detected, who to contact, and how to move forward once remediation begins.
Once you have the written plan, ensure every agent has access to a copy. Make sure they read and understand it. Then go beyond the written word and do some fraud drills. Go through a simulated fraud attack and practice the recovery routines laid out in the written plan.
Finally, make arrangements for how future plan updates will be incorporated and explained to agents. The key to a successful recovery plan is making sure it is always up-to-date and that agents understand what’s new.
Manage In-House, Hybrid, and Remote Teams
Not every call center is housed under one roof at corporate headquarters. Today you’ll find a variety of call center structures that a business can implement.
No matter what type of call center your company operates, having a solid workforce management plan in place is important. It should include any additional fraud management training required for agents who work in other locations, too. Those agents may not be able to participate in live training sessions, so keeping them up to date on the latest fraud prevention strategies will require a different approach.
Choose Quality Call Center Software
Long gone are the days when call centers were operated solely by human manpower. Today’s modern call centers leverage the strengths of call center software to help maximize efficiency and mitigate fraud while automating much of an agent’s workload.
There are a lot of software providers out there promising a lot of things. Ultimately, a call center’s needs will dictate which tool is best to use. But weeding through the countless options can be daunting.
We’ve put together two resources that will help you make a shortlist of your own. One is our guide to the best call center software providers. The other is our guide to VoIP phone service providers. Together, these lists will help you narrow down the viable options for your own call center solutions.