Community Bank security executive talks fraud prevention, banking safety


Jul. 3—Federal Trade Commission data from 2021 shows that Americans lost upward of $5.8 billion to various scams and fraud schemes, an increase of 70% compared to 2020.

Over 2.8 million Americans reported they’d been scammed in 2021, but that number is likely even higher as many scams or fraud schemes can go un-reported, and only half of all U.S. states contribute to the FTC’s tracking efforts.

Community Bank’s associate vice president and corporate security officer Daniel Cardi said it’s only gotten easier to scam people as technology has advanced, with instant money transfers and digital banking platforms becoming more and more common. The DeWitt, Onondaga County-based bank with branches across the north country and the Northeast was recently named the sixth most-trusted company in the country by Newsweek magazine, and Mr. Cardi said a large part of that comes down to the bank’s dedication to protecting its customers from fraud and scams.

“We obviously still have the battery of traditional fraud cases that we deal with, the different scams involving good people receiving counterfeited checks and getting tricked into forwarding those funds, those are still the most common ones we see,” he said. “But lately the toughest ones to deal with are the computer or phone-related scams.”

There are plenty of examples of digital scams used to steal money, and many of them may resemble scams seen throughout history. The most common are called “impersonator scams”, which could be lover scams, in which someone pretends to be a romantic interest in a far-away place and asks their victim for money; business scams in which someone pretends to be a businessman in need of an investment; or authority scams where the fraudster pretends to be the IRS or some other legal authority, and threatens the victim with punishment if they don’t pay.

Mr. Cardi said digital banking has brought more modern, complex schemes to the forefront now too, like “phishing attacks.”

In a phishing attack, the scammer “casts a line” by presenting themselves as someone they are not, like someone’s employer or bank. They ask the victim to share personal information, like their digital banking name and password, through a webpage or email designed to look like those of the real financial institution they’re impersonating. Once the scammer has the account information, they can steal the victim’s money and run.

Mr. Cardi said it’s something he deals with regularly with Community Bank’s customers, and had some words of advice that can be applied to almost any U.S. bank.

“We tell all our customers, we really harp on it, look at everything with a skeptical eye,” he said.

Never assume that the phone call, text or email you’ve received is authentic — look for spelling mistakes, determine if the phone number or email account the message is shared from actually belongs to the bank, and if you’re really in doubt, call the bank’s main phone number.

“Maybe your bank has a 1-800 phone number and this call came from a 1-888 number,” he said. “Call your branch yourself, directly. We’re always willing to help.”

Mr. Cardi said Community Bank and other financial institutions will never call a customer and ask them for their banking information — that’s information they should already have in front of them before the call.

“If I’m calling you from the bank about something, I already have the information on your account, I don’t need you to tell me,” he said.

Similarly, Community Bank will never ask for or request you recite your account password, something that is also true for every financial institution in the U.S. Banking passwords are designed to be hidden from nearly everyone once they’re created, and the bank itself should never need a customer’s online banking password to access their information., Mr. Cardi said.

He said there are plenty of new ways to get money out of someone’s account without stealing their information, and many methods now use cryptocurrencies or online “wallet” services like CashApp or Venmo. A scammer may convince a victim that they’re paying a charity, buying an item online, or sending money to a friend when they’re actually giving their money to a complete stranger. Cryptocurrency scams may involve a scammer convincing a victim to open a shared “wallet” with them, fund it with money from their bank account, and then the scammer will withdraw it all and disappear.

“These people are basically creating joint accounts with scammers. They’d each have their own credentials to log in, they’d pump money into this wallet and the scammer is just drawing it up and moving it,” Mr. Cardi said.

It can be much more difficult to recover the money from scams that involve the victim willingly transferring their money out of the bank’s control. Scams involving checks, stolen banking credentials or deliberate attempts by the fraudster to break into a customer’s account are far easier to stop than customer-initiated transfers.

“We were able to stop and recover well over 90% of the attempts on our customer’s accounts,” Mr. Cardi said. “That number is not as good when we’re the middleman.”

Mr. Cardi also had words of warning for people who may want to donate to GoFundMe campaigns or other charitable organizations. It can be unclear where the donations are going when people donate to GoFundMe campaigns, and Mr. Cardi said they should be approached with skepticism.

Mr. Cardi said their approach to protecting customers from scams was key to achieving the level of trust they’ve managed to establish with their customers, leading to the recognition by Newsweek.

He said it starts at the local level, with bank tellers and managers. When they see a transaction come through on a client’s account that raises suspicion, they’ll get in touch with the customer.

“I’ll pre-apologize for if we annoy customers because we’re pestering them because we’re concerned about something,” Mr. Cardi said. “It only happens when someone expresses a concern, usually the local people in our branches.”

Besides staying vigilant and monitoring bank and credit accounts closely, he said developing a strong and trusted relationship with your bank is the best way to keep your finances safe. At Community Bank, Mr. Cardi said the branch staff and security team, working with customers, prevent the most fraud.

“We rely on the branch staff. They’re there, they know their customers, and we count on that,” he said. “It’s a big part of how we succeed here, depending on the people that talk to our customers.”

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