Cyber-Enabled Fraud

Last Reviewed: August 2022

Additional information on cybersecurity and cybersecurity resources can be found in the Security Channel.

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Cyber-Enabled Fraud: Cybercrime

The Federal Financial Institutions Examination Council (FFIEC) shares critical information regarding cybersecurity. The FFIEC defines cybersecurity – “the process of protecting information by preventing, detecting, and responding to attacks.” Credit unions must manage internal and external threats and vulnerabilities to protect their information and infrastructure against cyber-based attacks. Cyber-enabled crime is carried out or facilitated by electronic systems and devices.

Common attack methods and examples include:

Account takeovers
Business email compromise (BEC) - fraudsters attempt to obtain information or funds by leveraging and impersonating another person's status
Compromised accounts
Hacking - unauthorized intrusion of a system by a party with the intent to commit a future crime, such as insider trading and identity theft
Impersonation techniques - including phishing and spoofing
Installation of malicious software - such as malware and ransomware
Payment card fraud
Social engineering - manipulation of a target to obtain sensitive information, often done through digital communication and online programs
Fraudulent wire transfers

According to the Cybersecurity & Infrastructure Security Agency (CISA) good security habits include the following items below. Educate employees and members on these security habits, enforcing them when possible, to mitigate cyber risk.

Improve password security – mandate strong passwords; use a password manager, multifactor authentication (MFA), and security questions; create individual accounts, setting only access and permissions needed for each user
Chose secure networks and implement cybersecurity software
Keep electronic device software current
Be suspicious of all unexpected emails – avoid clicking on unrequested links, downloading unrequested files, and sharing personal information
Implement automated preventative controls for user access and permissions

The FFIEC created the Cybersecurity Assessment Tool, which credit unions can use to measure their cybersecurity preparedness. Credit unions, for example, should have the following cybersecurity controls to protect their assets, infrastructure, and information and improve risk management:

Preventative controls – infrastructure management, access management, device and end-point security, and secure coding
Detective – threat and vulnerability detection, anomalous activity detection, event detection, and system irregularity alerts indicating a potential incident
Corrective – patch management and remediation of issues identified in vulnerability and penetration testing

The FFIEC also prepared a Cybersecurity Resource Guide for Financial Institutions, which outlines resources to assist credit unions in strengthening their resilience to cyber threats.

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Cyber-Enabled Fraud: Phishing Attacks

The OCC created a guide on Phishing Attack Prevention, a type of cyber-enabled crime. Internet fraudsters will send a seemingly legitimate email containing links to a phony website. Typical warning signs an email is a phishing attempt include:

A sense of urgency and pressure to act immediately
Requests for payment
Requests for sensitive information for verification purposes, including your social security number, account number, passwords, and other personal information

To prevent phishing, follow these tips:

Do not provide personal information over the phone or Internet following an unsolicited request.
Verify the sender’s legitimacy by initiating contact with the organization yourself, such as using the phone number and website provided on your financial institution’s monthly statement.
Do not provide passwords over the phone or Internet.
Review account activity regularly for unauthorized transactions.

If you are a victim of a phishing attack, call your financial institution immediately, as well as one of the three credit bureaus (Equifax, Experian, TransUnion).

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