Turmoil in the Financial Industry = Good Phishing Waters

The financial industry is being rocked by an unprecedented level of mergers, acquisitions and failures. You can count on a fresh batch of FDIC/NCUA seizures every Friday. Estimates vary, but it is expected that the financial crisis will claim between 300 and 1,200 banks before it’s all over. The latest prediction from RBC says 1,000 banks will fail in the next 3-5 years.

This creates ideal waters for phishing attacks. Here’s how it works:

"Dear valued member/customer,
As XYZ Financial becomes ABC Bank, please take this opportunity to update your account details. Simply click here and enter your information. We will verify your details and ensure your accounts are transferred accurately to ABC smoothly and without interruption. Thank you."

Wells Fargo recently put a warning up on its Wells Fargo – Wachovia blog:

"The integration of Wachovia and Wells Fargo may be seen and used by online crooks as an opportunity to create fraudulent communications. By taking advantage of current business and economic changes, these scammers may trick unsuspecting consumers into sharing confidential information."

When Bank One was bought by Chase, phishing scammers went on the attack, draining the accounts of unsuspecting customers who received authentic-looking emails.

Here’s what Sunil Kripalani, an online security expert at MicroWorld Technologies, says:

"What’s interesting here is the perfect criminal timing. When you have a big bank changing its name, naturally there’s bound to be some confusion among its customers. A naive customer might think that the security update is a part of the bank’s name changing process."

In this article, Kripalani shares the phishing experience of UTI Bank in India became Axis Bank.

During mergers and name changes, consumers aren’t as suspicious of communications that fall outside the typical routine. Their guard is down. Some people don’t think twice about requests to update details or verify information under these circumstances.

Bottom Line: When there is an upcoming merger, name change or acquisition, take the opportunity to demonstrate that you are a tech-savvy financial institution concerned about protecting people’s privacy and money.

With a thorough, proactive communications strategy, you can enhance people’s feeling of trust — the cornerstone of every healthy financial relationship. And most importantly, you’ll help make sure people don’t fall victim to crooks.