The collapse of Silicon Valley Bank opened a door of opportunity for fraudsters to take advantage of bank clients who have recently moved money or switched bank accounts — and banks are warning their clients to be cautious.

Fraud prevention fintech CertifID has reported an 18% increase in fraud cases since March and has protected more than $80 million in fraud attempts, CertifID Chief Executive Tyler Adams told Bank Automation News, noting, times of panic, stress and uncertainty, like the collapse of the bank, is “when fraudsters strike.”

As clients looked for new banking providers, tech companies sent emails with wire instructions or account information, Adams said. Those emails were copied by fraudsters who were acting as trusted parties, changing wiring instructions to different accounts. “Unfortunately, there were a lot of people that fell into that,” Adams said.

To combat the fraud, CertifID offered its automated verification service to nearly 300 companies for a 30-day trial period during April. “We were so worried about [the fraud] we ultimately decided to provide our product free of charge for 30 days,” Adams said.

The Software-as-a-Service platform enables a company to validate wire instructions to ensure they are sending money to the appropriate accounts in an automated manner, he said. Without an automated system, bank clients must call their bank to verify they are sending information to a trusted party — which can take up to 45 minutes through a call tree.

“We have about 10,000 lenders now that we effectively represent in the form of acting as an intermediary to validate that their information is in fact accurate for these businesses and consumers,” Adams said.

Preventing fraud

To avoid becoming a victim of fraud, “Consumers should protect their personal account information, passwords and one-time passcodes,” a JPMorgan spokesperson told BAN, noting, “Banks will never call, text or email asking for you to send money to yourself or anyone else to prevent fraud.”

JPMorgan also advises its clients:

• Never click suspicious links; and
• Never grant anyone remote access to phones or computers.

Additionally, even with technology in place, to ensure a request from your bank is coming from a trusted source, clients are encouraged to call the recipient’s phone number obtained from a verified website or call your bank to speak to a legitimate representative, the JPMorgan spokesperson said.