¶ Intro / Opening
Hey everyone. This is Mark Trekel with a short take of With Flying Colors. Recently, we had an hour long podcast on 10 risks identified by the OCC, and we talked about how that relates to credit union risks. I am taking that and putting it in more digestible sizes with one topic at a time. And today's topic is fraud schemes. Thanks for listening. Okay.
Fraud schemes targeting traditional payment methods and otherwise, Dennis, I know you and I were chatting a little bit about uh, a generic situation from a member that that, that you worked with. But any thought, anything you wanna share about that example or anything else on, on what you're seeing and hearing about fraud or what you did at, at your credit union to it?
Yeah, and, and this was sort of a, at the end of my career, is just all the fraud that you, post the elderly. That's, that, that happens quite a bit. Particularly, and this one happened to be a timeshare resale fraud scenario where right, where we get a member. Wants the wire off 25,000. I get wind of it. I, I, I was contacted saying, Hey, we think there's something wrong here. This doesn't really fit the member's profile. She's a retired school teacher. You know, this doesn't fit her profile.
So, right. So then we, we do a little bit more digging. Give her a call, ask her what's going on, and she talks about, well, I can sell my timeshare for a million dollars. I forget the number. Well, that's not how, there's no way you're gonna sell a timeshare for a million dollars. It, it just doesn't work like that. Maybe, maybe there are some, but not for us. Not for her. Right. Not for that type of individual. Um, you know, she's elderly.
We're trying to talk to her and saying, well, you know, if you take a look at some of the, the latest scams, that's a big scam going out out there right now. You know, go to the Attorney General's site. We can show you that information. 'Cause this person wants to send, you know, wants you to send them 25,000. You're probably not gonna get that money back. Um, right. So they, they call her, they, it was an uns, probably unsolicited type of offer that she received.
Say, Hey, we can sell your timeshare for a million bucks. All you gotta do is we'll just need to wire us 25 grand and then you can collect that back at closing. And she, she was convinced right, that it was the real deal. So tried to talk to her, got her on the, on the phone with, uh, attorney General. So we sort of went well beyond, 'cause I was right. It was an elderly individual don't want her to lose 25,000. 'cause once a wire is gone or is out, it's gone. You can't get that back.
I think finally at the end we were able to maybe talk to her and maybe a daughter of hers to have her stop. 'Cause we weren't gonna, we weren't gonna do the wire. We said, well, if you want this, you're gonna have to, you're gonna have to take, you're gonna have to do it someplace else. 'cause we know this is a, this is fraud. Oh, that's great. You're gonna be out 20 grand. So, right. There's a lot of that stuff. Not only that, right? You got the male bride.
We've seen those where, it's crazy what goes on out there in, in the, in the, for our members, what they're facing as far as as far as these types of incidents. So I just wanna share that one.
Yeah. I have a question for you, Dennis. Yeah. Had you heard about ATM Jack potting before? I never heard that term till I read this risk word. I have.
Yep. I've heard of that. That, yeah, I haven't seen that happen in our area. Maybe it has, but in our area where we've seen a lot of ATM fraud was on skimming and it, it's gotten a lot. It was, there was a ring here about two or three years ago. I don't know. There are a lot of financial institutions that got hit. It was pretty sophisticated. So with skimming, they put a, a device at the ATM and they read the card, make stripe, and then they have a little camera.
Up above getting the pin number, and then they create these cloned cards. Then four or five days later, we get these phone calls right from our members saying, Hey, here, you know, we got money we got money leaking out of our account. What's going on? Then you, you, we take a look at our cameras, sure enough, you see the individuals messing with our ATMs generally at like two or three in the morning. Um, so no one, no one's necessarily is paying attention. And so we've seen that.
But yeah, I've seen it. I've heard of ATM jackpot jack potting, but, uh, the skimming thing, um, I've seen that that part, that type of situation maybe should be maybe diminishing just because of the types of cards we're using today. But those types of things happen I think quite often to financial institutions skimming and possibly jack potting as well.
What is ATM jack potting.
So they actually get control of the, a TM using a universal key or whatever. And they install software to let them just push a bunch of buttons and it just spits out all the cash in the machine. Oh my.
So they're
actually getting into the operating system of the ATM quite often with Universal Keys, which means there's probably somebody from inside the credit union or somebody inside the, you know, the bulk or the money transfer people. Wells Fargo, the people that pick up money and stuff. Armored car services. There we go. They have Universal ATM keys.
That's, that's just reminded me of, it's like a, a different version of stealing the key from the post postmaster to, so you can go right, go to the corner mailbox and then take all the checks. And wash off wash off the ink and rewrite 'em and all that. Uh, yes, I hopefully, hopefully have good tampering
types of, of tools on your ATMs that would, detect that someone's messing around with your ATM and, you know, get some kind of notification. So
Yep.
Add,
add another layer
of cost
to protect it. Yep.
There's a lot of times they'll hook a laptop or a palm like raspberry to 'em and they'll put 'em in like a supervisor mode or kind of like almost your super user, like you're, altering the software and they literally take over the a TN. That's wild. That's wild. Well, I said I didn't even know it was an issue until we read this risk report and I guess it's kind of an ever-growing big issue big enough that they spend a paragraph talking about it in this risk report. Good point. Good point, Steve.
Nothing to add. Nothing to add. He's very good. Alright, so, um, B-S-A-L-M-A-A-L-M-A-M-L compliance burdens are increasing is the