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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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June 13, 2022

Quishing: Another "Fish" in the Fraud Ocean

We should all be knowledgeable about phishing attacks by now, given the number of warnings consumers and businesses get about this type of email fraud. We've even warned about it, in this Take On Payments post last year, and in others. We've also warned about smishing, a variation that uses SMS text messaging rather than email. Vishing is another form of social engineering that we've also mentioned in the blog. It's like phishing but comes through a telephone, often from a spoofed number—one that looks like a legitimate number of a company or agency. All of these varieties of fraudulent attacks have the same goal: to "fish" for your login or account information.

And now there's quishing. Again.

Quishing is not new but has experienced a revival within the criminal element as a result of the increased use of QR codes for digital payments. We first wrote about the risks and benefits of QR codes back in 2012, when they were used predominantly on printed media such as billing statements. The account holder could scan the QR code to go to the biller's payment website to pay their bill. We wrote about them again in late 2020, when merchants used them in the pandemic as an alternative contactless payment technology to near field communication. Since then, the use of QR codes has exploded—not just for payment applications, but also for other contactless usages born from health concerns: to let people access digital restaurant menus, for example, or to get detailed product information. QR codes are easy to implement, but that also makes them easy to alter without detection. The criminal sends an email with a QR code that, when captured by the victim's camera, opens a counterfeit website that may look like a merchant's legitimate website but is intended to steal account credentials. The email may contain a coupon to give the victim further incentive to capture the QR code. Unfortunately, detecting quishing attacks is difficult for email malware applications since the QR code is embedded in the email message.

QR code manipulation can also take place on printed material. Cases have been reported where stickers with altered QR codes have been placed on event posters at a venue or in other public places. When the person accesses the fraudulent QR code to purchase event tickets, the criminal captures the payment card information then uses that information to make fraudulent purchases. Meanwhile, the victim shows up at the event and is told their ticket confirmation is invalid.

The same defensive measures used to spot phishing, smishing, and vishing attacks should be used to guard against quishing attacks. Be wary of messages from unknown sources, especially if they offer an incentive or convey a sense of urgency. Always be suspicious of any request for you to "confirm" your account credentials. Keeping a solid defensive position will help keep you safe from these attacks.

April 18, 2022

Smishing: Phishing with a Different Bait

The Retail Payments Risk Forum team is always on the lookout for changes in attack patterns by the criminal element regarding payments. Our sources of research include industry news, networking with payments stakeholders, third-party reports, and our internal security warnings. One other source we have is our own personal experience, though we have to remind ourselves of our colleague Claire Greene's warning that each of us is a sample of one. What we experience may not be, and probably isn't, what the average person might encounter.

I was recently reminded of this warning with regard to my own experience with smishing attacks. Unlike phishing, which uses email, smishing uses SMS text messages to entice you to click on a malicious link that either loads malware on your phone or, more likely, directs you to a fake website to capture your login information. (Simply opening the text message poses little risk.) Over the last several weeks, I have been getting one to two text messages a day on my phone asking me to click on a link to respond—usually to a customer satisfaction survey allegedly from a major retailer, with the offer of a gift card as a reward for responding. One message informed me that a product I had ordered (and already received) from an online retailer couldn't be shipped until I clicked on the link to pay an international tax of $2.83. I am confident that all these messages were "smishing" attempts.

Although a part of me was tempted to assume my experience was indicative of a very recent trend, I decided to research whether I was indeed average in experiencing an increased number of these attacks. It appears Claire was right—although my research showed that smishing attacks have substantially increased, seems I am fortunate to have only recently become a target. A cybersecurity firm that claims to handle 80 percent of mobile messages in North America has reportedOff-site link that the number of smishing attacks during the third quarter of 2020 had increased 328 percent over the previous quarter. The FBI's Internet Crime Complaint Center (IC3) doesn't separate smishing from phishing, vishing (phone calls), or pharming (redirection to a fake website) incidents, but the IC3's Internet Crime Report 2021 Adobe PDF file formatOff-site link shows that these complaints increased 34 percent from 2020 to 2021.

The warning signs for a smishing message are quite similar to those of a phishing attack and may include the following:

  • A sense of urgency, pushing you to respond right away. As we are now in income tax season, these messages may include references to past due taxes or a suspended refund.
  • An offer of a reward such as a gift card, rebate, or a coupon for a future purchase from the retailer
  • Poor English grammar or improperly formatted phone numbers
  • An unknown sender. It is best to report or delete messages you weren't expecting from people you don't know.

Be aware that what appears to be the sender's phone number is often spoofed. It may be a familiar number or at least may have a local area code. This is intended to increase your trust and thus the likelihood that you will respond.

Likewise, the protective measures you should take to protect yourself against falling victim to a smishing attempt are similar to any other safeguards you take:

  • Keep your mobile device software and browsers updated with the latest security upgrades.
  • If you are in doubt about the legitimacy of the message, do not use the link or phone number provided in the text to contact the sender. If the message appears to be from someone you know or a business you are familiar with, find their number in your contacts or online and contact them directly.

I realize that the criminals launching these types of attacks are generally using automated systems to transmit hundreds of thousands, if not millions, of the messages in hopes of getting even just a small percentage of recipients to click on the link. So even if you are like me and not average, there is a good chance you have been or are likely to be the target of a smishing attack. I hope you will use information to not become a victim, and distribute it to help keep others from falling victim.

October 12, 2021

Scams and Student Loan Forbearance

If you are a millennial like me, sitting on a mountain of student loan debt, chances are you've probably received at least one call or letter a month with offers to suspend your student loan payments as part of the administrative forbearance set by the Coronavirus Aid, Relief, and Economic Security—or CARES—Act. In fact, I recently received a letter stating that I was "prequalified" to have my federal student loans forgiven in exchange for an upfront fee. Of course, not all of the unsolicited letters and calls are scams, but if you're asked to pay a fee to have your student loans canceled, it's a safe bet that those offers are more than likely scam tactics.

Although student loan forgiveness scams have been around for some time, fraudsters claiming to be affiliated with the Department of Education are exploiting the current economic uncertainty by creating confusion around how borrowers can qualify for the administrative forbearance program. Some fake companies will offer to work with borrowers to negotiate a lower repayment plan for free and then request that they send their payments directly to the company rather than to the lender. Furthermore, scammers may ask for personally identifiable information or the borrower's Federal Student Aid (FSA) login credentials in hopes of stealing the borrower's identity or money. In a time when unemployment is high and many are financially vulnerable, people are likely more willing to take risks if it means obtaining some desperately needed financial relief—and fraudsters are well aware of this.

So what should you do if you are contacted by a company offering student loan debt relief? The FSA recommendsOff-site link you look out for these red flags before you respond:

  • They require you to pay upfront or monthly fees.
  • They promise immediate and total loan forgiveness or cancellation.
  • They ask for your FSA ID username and password.
  • They ask you to sign and submit a third-party authorization form or a power of attorney.
  • They claim that their offer is limited and encourage you to act immediately.
  • Their communications contain spelling and grammatical errors.

The FSA also listsOff-site link some examples of common phrases that scammers use in their communications:

  • "Act immediately to qualify for student loan forgiveness before the program is discontinued."
  • "You are now eligible to receive benefits from a recent law that has passed regarding federal student loans, including total forgiveness in some circumstances. Federal student loan programs may change. Please call within 30 days of receiving this notice."
  • "Your student loans may qualify for complete discharge. Enrollments are first come, first served."
  • "Student alerts: Your student loan is flagged for forgiveness pending verification. Call now!"

Although the latest extension of the administrative forbearance into early next year may be a huge relief for many borrowers, it unfortunately also means that scammers have more time to exploit the situation. I encourage you to read an FSA articleOff-site link that contains other helpful information on how to identify and report a student loan scam.

May 17, 2021

Common Learnings from Fishing and Phishing

As a youngster growing up in Southeast Georgia, one of my favorite summer pastimes was fishing with my older brother at the local creek using cane poles and some corn niblets or, if we really hit the bait treasure box, pieces of beef hot dog. There is a reason they call it fishing and not catching as most days we barely got a nibble. But there were those days when we would land a nice-sized bluegill.

As I grew older and my fishing opportunities expanded, I began to learn more about the science and techniques of fishing. To increase the catching, there was a level of knowledge needed as to what type of bait (artificial or live) and what fishing technique (bottom, slow, or fast retrieve) to use to target the species of fish I wanted.

I reviewed the FBI's 2020 Internet Crime Report Adobe PDF file formatOff-site link recently and learned that there were more than 240,000 phishing/smishing/vishing/pharmingOff-site link incidents in 2020—an increase of 110 percent over 2019 (and these are just those that were reported). Losses from these incidents were estimated at $54 million. Reading about this made me flash back to my fishing learnings. I reflected that in phishing, as in fishing, there are those people who simply throw out a baited hook to see what bites they get. They blast out a generic email to tens of thousands of email addresses they bought or otherwise acquired illegally, promising fortunes if you only pay, in advance, a finder's fee or the taxes, with gift cards or cryptocurrency. (These messages have advanced over the years to eliminate the poor grammar and misspellings and provide a more believable scenario about the money that belongs to you.)

It has become obvious to me from my research, from seeing the attacks firsthand, and from listening to my colleagues that criminals are becoming more sophisticated in their messages. They are quick to take advantage of current health or natural disaster crises, sending links to “breaking news” that contain malware or links to false websites to capture your personal information or other credentials. They have become very skilled in identifying a target and researching that individual's hobbies or life events through social media, which allows them to craft a message that appears legitimate and appeals to the target's interest.

My colleagues and I are constantly trying to better educate the public about these threats through our posts, webinars and other publications. Just when we think we've seen it all, the criminals come up with a new twist on an old scheme, such as what we saw over the last year regarding the stimulus payments. The bad guys are always going to be out there hoping they can get a nibble from you so they can try to set the hook and reel you in. Don't let yourself be the catch of the day.