Credit & Collections Workshop IT COULD HAPPEN TO ANYONE: THE EVOLVING CHALLENGE OF PHONE SCAMS TARGETING UTILITY CUSTOMERS

Transcription

1 Credit & Collections Workshop IT COULD HAPPEN TO ANYONE: THE EVOLVING CHALLENGE OF PHONE SCAMS TARGETING UTILITY CUSTOMERS

2 Combating scams targeting utility customers Jared Lawrence Vice President of Revenue Services Duke Energy John Williams Fraud Investigator Food Lion, Delhaize Group U.S.

3 Agenda Duke Energy introduction The Scam Evolving trends and scam tactics Scam SWAT team Duke Energy s customer awareness campaign Retailer s scam prevention initiatives: Delhaize America The road ahead 2

4 Duke Energy Six-state utility operations 7.3 million electric customers Represents population of approximately 23 million people 500,000 natural gas customers Proposed Piedmont Natural Gas acquisition to add 1.5 million natural gas customers Commercial portfolio: Duke Energy Renewables Duke Energy International $118.5 billion in assets Dow Jones Sustainability Index 100 Best Corporate Citizens by Corporate Responsibility magazine 3

5 The Scam This is your local utility company. I am calling to inform you that your last two payments were rejected. As a result, a truck has been dispatched to disconnect your power, unless you make a payment within 45 minutes. Oh no, I thought my payment went through. It s the lunch hour and my restaurant is packed. Can I make a payment this afternoon before 5pm? Business owner or residential customer I am sorry, but as I said, our truck has already been dispatched. I am calling you as a courtesy. And since your last two payments were rejected, you are going to have to pay with a prepaid card from your local retailer. The amount needed to stop the disconnection is $1,537 I don t know if I can make a payment in time, but I will see what I can do! Scammer posing as utility representative Customer call link There is a <retail store> close by. Purchase a <prepaid card> there. When you call back, please be sure to use reference number and have the prepaid card with you or some variation of this conversation 4

6 Prior to 2015 Observed several waves of scams targeting Duke Energy customers Detailed discussions with Law Enforcement and State Attorneys General, but limited ability to take action Cooperation with local media Several customer awareness campaigns: 2013 Integrated Communications Campaign: Radio messages National and local media outreach Customer communication channels (IVR, bill statements) 2013 Hispanic Media Outreach: Carolinas specific 2014 North Carolina Attorney General Collaboration Press conference Statewide media coverage 5

7 2015 Higher volume of activity Notable increase in scam reports from our customers Higher call volume longer, more complex calls Scammers shifting tactics to focus on small businesses during their peak hours Greater sophistication leading to more customers losing money Spoofed Duke Energy s IVR and caller ID Effective social engineering to convince customers that they have actual account information Headlines from other industries fuel concerns about data breaches 6

8 Scam SWAT Team Legal Customer Care Corporate Security Revenue Services IT Security Communications Telecommunications Sourcing 7

9 Scam SWAT Team Legal Customer Care Corporate Security Revenue Services IT Security Communications Telecommunications Sourcing Scam tracking database Scam report application for CSRs Interviews of targeted customers Relationships with prepaid product providers and retailers Collaborative efforts with peer utilities 8

10 Scam SWAT Team Scam tracking database Date Reported City State Dollars Paid What Caller Asked To Do 11/09/2015 hickory NC to go to wall mart and send wired money to robert williams wired reference num // num given ext. 1 11/09/2015 BEAUFORT NC 0 scammer wanted customer to go to walmart and get pre paid debit card to avoid non pay disconnect. Also states if done today a 40 % off special next 3 mos. 11/17/2015 Greensboro NC customer was asked to go get a money card to pay for her new meter. Scammers Call Back Phone Number Scammers OR Name (888) Robert Williams Scammers Caller ID (888) (800) Miguel Lopez

11 Trends Customers reported 3150 scam attempts between 6/17/15-3/17/ of those customers reported losing money to a scammer Total reported losses = $217k Highest single loss reported = $4990 Note: FL and Eastern NC/SC reporting were not fully active until Aug (From 6/17/15) (Through 3/17/16) (From 6/17/15) (Through 3/17/16) (From 6/17/15) (Through 3/17/16) 10

12 Trends (From 6/17/15) (Through 3/17/16) 11

13 Retailers and prepaid product providers Directing customers to prepaid product providers hotlines (excerpt from customer service script): Enter pertinent information the caller collected in the Scammer Information section. What was the customer asked to do? Collect details about what the customer was asked to do, where they were asked to purchase a prepaid card, the scammer's call back phone number, etc. What type of card was purchased by the customer? If the card carries either the Reloadit or Vanilla brand, it may be possible to stop the funds transfer. Reloadit cards are most commonly available at grocery stores nationwide, but other retailers sell them as well. Vanilla cards are sold nationwide through a variety of retailers; some of the more notable sellers include Walmart, CVS, Walgreens, Rite Aid, Family Dollar and Dollar General, but there are many other retailers as well. Was the card purchased recently? If customer confirms the card was purchased that same day, advise the customer there may be an opportunity to stop the money transfer. For a Reloadit card: Please direct the customer to immediately call to speak with Reloadit customer service. The customer will need to have the Proxy Number, which is a 19 digit number that starts with If the customer does not have the proxy number, or the number does not begin with 60395, the vendor will not be able to assist the customer in attempting to recover funds. For a Vanilla card: Please direct the customer to immediately call to speak with the Vanilla vendor s fraud hotline. The customer will need to have the card number. If the customer does not have the card number, the vendor will not be able to assist the customer in attempting to recover funds. 12

14 Scam SWAT Team Legal Customer Care Corporate Security Revenue Services IT Security Communications Telecommunications Sourcing Review of Duke Energy systems Review of accounts of targeted customers Confirmation of security of third-party service providers 13

15 Scam SWAT Team Findings No Duke Energy customer data breach No system vulnerability being exploited by scammers Conclusions from customer interviews: Scammers are skilled in convincing some customers that they have actual account information when they in fact do not. In some cases, they are able to deceive the customer into giving actual balance or payment information, which they then restate back to the customer to build credibility. 14

16 Scam SWAT Team Legal Customer Care Corporate Security Revenue Services IT Security Communications Telecommunications Sourcing Comprehensive awareness and education campaign 15

17 2015 Customer Awareness Customer Care Operations executed an outbound calling campaign to all small business customers Mobile site fraud alert Vanity URL Bill messages in all jurisdictions (on paperless bill; on back of paper bill envelope) Bill inserts Hero banner placement on all state landing pages at duke-energy.com. IVR messaging Media outreach 16

18 Customer awareness campaign We want you to be aware of a growing phone scam that is targeting Duke Energy customers. Phone scammers posing as Duke Energy employees call and insist you are delinquent on your bill. They may also threaten to turn off your power, rig caller ID to make it look like the call is from Duke Energy, or tell you to put the money on a prepaid debit card and ask for the card number. Don t believe it. Duke Energy will NEVER call to demand immediate payment about money owed without first sending you a notification by mail, or ask for credit or debit card numbers over the phone. If you have any doubts, HANG UP and call us directly at

19 2015 Scam Awareness Campaign Six-week social media scam awareness campaign: Continued customer and public awareness Simple, compelling and shareable digital communications Organic and paid content External media integration 18

20 2015 Scam Awareness Campaign Social media campaign (launched in October) Twitter, Facebook, LinkedIn: 19

21 Retailers and prepaid product providers Several retailers and prepaid product providers are working aggressively on consumer protection (Signage at national grocery chain) 20

22 April 2015: Delhaize America and Blackhawk Network established automated notifications: Delhaize set a dollar threshold to trigger notifications with the goals of: Significantly impeding scam activity Minimally impacting legitimate purchases Once Delhaize receives a notification, an immediate response is necessary to actually prevent loss to a victim. A small group of associates at the corporate office receive these s and immediately contacts the store. Store associates were also given training materials and signage to help prevent fraudulent activity Trained to spot common fraud tactics (i.e. overdue utility bills, relatives in jail, IRS, etc.) When necessary, associates at the corporate office will speak with the customer to reaffirm store associate s warning Automated Notification Results 35% 22% 43% FRAUD UNCONFIRMED NON-FRAUD Almost half of the calls made to stores prompted by the automated notifications resulted in confirmed fraud where we prevented a victim from losing money. Approximately 1/3 of all the calls had customers telling us they were not being scammed. Later, we would find out that many customers that told us they were being not being scammed were actually told by the fraudsters to lie to us, and were even given plausible explanations. Even though our normal response time was within 2-5 minutes, we would still miss slightly over 20% of customers we tried to contact.

23 The road ahead Keys to defeating the scammers: Concerted, ongoing effort across the industry to promote heightened awareness among all customers of the latest scam tactics Saturation of communications channels Sustained customer education effort Cooperation and data sharing with law enforcement Coordination with prepaid card industry and retailers Date Reported City State Dollars Paid What Caller Asked To Do Scammers Call Back Phone Number Scammers OR Name Scammers Caller ID 12/03/2015 KISSIMMEE FL 0.00 James told George to go get a Money gram "7034RCD" $600 to ROSH ( not DE) He stayed on the phone with him while George went to Walmart and The Woman behind the counter refused to sell him one and cld her mgr who told him call Duke! (866) James 22

24 Please contact me for further conversation: 23

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