Report: Bank Employees Help Scammers Dig Into Customer Data

Low-level bank employees are selling customer information to scammers, exposing a weakness in financial institutions’ risk protections.

It’s a pattern cropping up at banks around the country, Bloomberg reported Monday (Dec. 30). Banks say the burden for preventing these types of scams falls to the customers themselves. But although some scams seem to target people randomly, others involve fraudsters who know a lot about their victims’ finances from the start.

“The more employees there are inside a company with access to sensitive customer information, the higher the risk that access is going to be abused,” said R.J. Cross, a privacy advocate at the Public Interest Research Group, per the report. “Companies need to have technical measures in place to ensure employees and contractors can’t run off with people’s information or access data that isn’t necessary for their job duties.”

Warnings about the issue aren’t new, the report said. Nearly a decade ago, former New York Attorney General Eric Schneiderman called on banking giants to bolster their defenses. This came after an investigation uncovered an identity theft ring had recruited bank tellers.

A subsequent study by Schneiderman’s office found an uptick in leaks by banking insiders, with information “often obtained exclusively for fraudulent purposes,” according to the report.

That was in 2016. Eight years later, the problem persists. A TD Bank teller in New York City used her access to bank data to send customer information to a criminal network on Telegram, the report said.

The bank fired more than a dozen employees earlier this year to address failings in its anti-money laundering (AML) program. It also embarked on a comprehensive overhaul of its AML practices.

The PYMNTS Intelligence report “The Impact of Financial Scams on Consumers’ Finances and Banking Habits” found that scams can impact more than just a customer’s finances. More than half of scam victims consider leaving their financial institutions after being scammed, while 30% do just that. From there, banks must scramble to replace that customer and restore their reputations.

“Most consumers have multiple relationships with different banks, and they will switch allegiances quickly based on where they feel there’s the highest level of trust and confidence in the relationship,” Featurespace CEO Dave Excell told PYMNTS in October.