When fraud happens, it becomes a real test of a company’s ability to not only protect the customer but also to re-establish trust and loyalty through the customer experience (CX) interaction. Quite understandably, the victims are rattled and want someone to blame. Unfortunately, this frustration often leads to anger directed at the financial institution and the customer care associate rather than the perpetrator. That’s why it is crucial that whoever takes the call or breaks the news knows how to handle this interaction with confidence and empathy to begin the process of rebuilding the customer’s faith in the financial institution so that the victim doesn’t become a former customer. It is also essential for businesses to have processes and technologies in place to set up the customer care associate for success to deliver the desired outcome.
How big a problem is fraud? The sheer magnitude of fraud taking place is shocking. There are various definitions and types of fraud, but let’s focus on one of the most commonplace and widespread occurrences: credit card fraud. In 2023, the Federal Trade Commission (FTC) received over 471,000 reports of credit card fraud, with total losses of over $4.7 billion. ‘All cases’ have exploded to 2.6 million reports, reflecting a significant increase in all categories over recent years, according to the Federal Trade Commission (FTC).
This, of course, begs the question of why fraud is on a seemingly inevitable growth curve. There are multiple contributing factors:
- Increasing digitization means more data available and more options for committing fraud.
- The rise of “synthetic fraud,” a fraud tactic that combines fabricated data with stolen or purchased legitimate data to create a “fake” identity to commit financial fraud.
- More sophisticated forms of “microfraud” or “subscription fraud” which focus on low-dollar schemes that can go unnoticed by today’s users, who are balancing multiple legitimate subscriptions and dozens of low-dollar transactions.
The most significant underlying reason is simple. Fraud pays for criminals, and it is relatively low risk, especially when performed at scale. Prosecuting fraud is incredibly difficult because of the technology being utilized by perpetrators who are highly skilled at covering their tracks and, in effect, experts in the trade. Even when they’re caught, it is rarely the “brains” behind the operation that is brought to justice and stopped.
In fact, that’s where we see the largest growth in sophisticated fraud tactics from organized fraud rings. They’re committing synthetic fraud at scale using stolen and fabricated information and tools, including AI and bots, then creating thousands of seemingly legitimate accounts using the customer acquisition processes of banks and other institutions.
These accounts sit in the inventory of the bank or financial institution, sometimes for years, perhaps occasionally making small transactions and building a credit profile. Without warning, these accounts “bust out” and go on sudden spending sprees, racking up thousands of dollars in fraudulent purchases. It’s a ‘cash out and run’ blaze of glory.
According to a recent piece by TransUnion, synthetic fraud is expected to reach $1.94 billion by 2025. Transunion references a major institution discovering via an internal executive analysis that as many of 15% of their accounts were synthetic. In real terms, that equates to hundreds of thousands of accounts and potentially billions of dollars in losses.
In the aftermath of a fraud event, real people who have been impacted by these actions either reach out to the financial institution because of suspicious activity or are on the receiving end of a call to advise them that they have been the victim of fraud.
This is where an exceptional approach to customer experience is put to the test. In this case, when the breakout happens, it happens en masse. Responding effectively while looking after hundreds, thousands or more customers who are angry, upset and lashing out is crucial and a core part of protecting a financial institution’s reputation.
Full outsource services include onboarding and training specialists, combining a scorecard-driven and empathetic approach, with technologies to identify, manage, mitigate, and prevent occurrences of fraud. For example, in my business alone, one-quarter of the workforce specializes in fraud management.
Organizations capable of providing services of this nature–which comprehensively address the customer experience, including at times when customers have an emotionally charged experience, like fraud, are in demand. Having the experience, scale, and sophisticated supporting technology is what it takes to go deeper into fraud, prevent more fraud from happening, and ensure that customers who are impacted come out on the other side still loyal and feeling confident in their banking partner.
While many businesses turn to contact center service providers to offload the burden and challenges of recruiting, onboarding, and maintaining a capable workforce of fraud specialists, not all service providers are equally capable of meeting the need. When choosing a customer care partner to support fraud services, it’s essential to select a partner with deep and broad experience, and expertise in effectively and efficiently shouldering the volume of cases that come with the territory. At the same time, because customer interactions about fraud can be very sensitive and complex, the best outsourcing partner must also have strategies and controls in place to ensure that issues are not only resolved, but that fraud victims come away from their interactions feeling heard, reassured, and confident.
A successful strategy begins with establishing the right candidate profile and recruiting the right people by leveraging quantitative and qualitative assessments and interviews that test for soft skills such as problem solving, conflict resolution, etc. It helps to have existing relationships with organizations that have access to educated/skilled talent pools, such as colleges, vocational schools, community groups, etc. Once a qualified workforce has been recruited, it’s essential that they are onboarded properly with the right program of training, coaching and nesting that takes advantage of modern technologies that are effective for a broad range of learning styles. It is also of critical importance for the business to ensure that team members handling fraud workloads be positioned for success. Employee experience gets passed on to the customer, therefore a business must solve for the complexity of the agent’s job, navigating multiple disparate data systems while managing potentially frustrated customers. Establishing a benchmark for the employee experience and placing controls in place to ensure the best employee experience, in turn also ensures the best customer experience.
For businesses for whom outsourcing simply isn’t an option, whether due to resource constraints or other factors, employee experience is paramount. We know that the individual customer doesn’t feel the “average” customer experience score – they feel the results of their individual experience with an agent. To deliver the best experience for every individual customer, a business must define the desired experience and outcome for each interaction, establish measurements for evaluating whether they’ve been achieved, and put countermeasures in place to course correct when an interaction is getting off track.
At ACT, we have a portfolio of AI-enabled software designed to reduce the complexity of the role and position the representative for success. We leverage both existing and proprietary technologies that make it possible to detect, predict and prevent escalations within a customer interaction by suggesting next-best actions, pulling in a live “co-pilot” so the representatives can concentrate on the individual customer and leverage their “soft skills” to the fullest.
Conclusion
With the astronomical explosion of fraud and corresponding light speed at which fraudsters’ cleverness evolves, even the most agile and expert organizations face a significant challenge in tackling the volume of fraud-related customer inquiries. And the reality, as shown in the statistics, is that fraud continues to increase and evolve. Companies interested in effectively dealing with fraud must take a holistic approach, with critical attention paid to the customer’s experience. To handle the extraordinary volume of attacks, a business should seek an outsourcing provider with deep and broad experience, a well-established and experienced staff, augmented by the right tools leveraging AI-enhanced technologies.
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About ACT
ACT is a U.S.-based business process outsourcing provider and global leader in customer care. Our approach is founded on a winning formula – that the best solutions integrate Employee Experience (EX) + Customer Experience (CX) + User Experience (UX) + Digital Experience (DX) + Multi-experience (MX) for an outstanding Total Experience (TX) overall. As a 100% employee-owned company, we have placed Employee Experience at the center of our business strategy because we know that engaged employees ensure the best customer outcomes. As shareholders in the business, our Employee Owners have a personal interest in delivering value to our clients, and their motivations are uniquely aligned to our clients’ success.
We have more than 27 years’ experience helping our partners drive growth and brand loyalty by providing amazing experiences across every touchpoint and channel of the customer journey. We serve many of the world’s top companies, including numerous Fortune 50 clients. We offer a broad range of leading-edge technologies and custom solutions tailored to your business needs to make every customer connection count.
