Contact centres: the new frontier in fraud prevention

Fraud costs the UK economy billions annually, yet the damage begins long before the financial loss is recorded.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Contact centres are increasingly becoming a critical entry point for fraudsters, with data-gathering and account set-up activities forming the early stages of  fraud attacks in other channels. Recent research conducted by Smartnumbers reveals how significant this challenge has become, offering insights into why a proactive approach to fraud prevention is essential.

The overlooked role of contact centres

While the financial industry has traditionally monitored and measured fraud at the transactional level, this approach only addresses the ‘cash-out’ stage of the fraud life cycleData from Smartnumbers customers shows that 28 per cent of flagged activity in contact centres is reconnaissance, while 59 per cent is related to attack setup. These stages allow fraudsters to validate stolen information, steal more data, and prepare their exploits.

To reduce the amount of fraud, organisations must recognise the importance of securing customer data at the point of initial contact with a fraudster. As Matthew Addison, Chief Revenue Officer at Smartnumbers, explains: “Organisations need to stop focusing solely on the financial loss and start addressing data loss through reconnaissance [in contact centres], which is a precursor to bigger fraud incidents.”

Fraud is a universal challenge

A survey of 250 senior fraud professionals across financial services, retail, travel, and IT/telecoms confirms the pervasive nature of fraud. Over 85 per cent of respondents reported high levels of fraudulent activity in contact centres, naming social engineering and voice modification as the tactics most commonly used to deceive agents. 

However, behind the scenes, automation adds another layer of complexity and scale - as bots can repeatedly target interactive voice response (IVR) systems to extract sensitive information.

Tim Burton, Chief Product and Success Officer at Smartnumbers, highlights the growing sophistication of these attacks: “Fraudsters exploit the IVR by making numerous attempts to extract or validate information, a process that can take multiple calls before they get what they need. This activity is often invisible to businesses.”

Gaps in current prevention measures

Despite the growing threat, many organisations still take a reactive approach to fraud prevention. Fewer than half of surveyed companies use automated fraud-detection methods in contact centres, such as flagging unusual call behaviours or denylist numbers. Anecdotally, some even still rely on manual processes to spot fraudsters, leaving significant vulnerabilities.

Additionally, fraud signals identified within contact centres are often not integrated into broader fraud-prevention strategies internally or shared externally. This lack of data sharing, both internally and externally, means organisations are missing critical insight for fraud prevention. As Burton notes, “Fraud signals should be fed into overall fraud-prevention strategies because they’re signs of reconnaissance or data acquisition.”

Shifting the focus to early signs of fraud

A more effective approach to preventing wider fraud prioritises safeguarding customer accounts and preventing data leakage at the earliest possible stage. By identifying and addressing suspicious activities in contact centres, organisations can disrupt fraudsters before they have chance to complete a transaction. Automated call monitoring for suspicious behaviour, coupled with improved collaboration and data sharing, enable businesses to catch fraudsters in the act and prevent wider damage.

And since fraudsters are already collaborating to share verified data among criminal networks. It’s time for legitimate organisations to follow suit. Sharing insights about fraud behaviours strengthens defences across sectors, reducing opportunities for exploitation.

Fraud prevention must evolve beyond financial losses to include proactive measures that address data leakage at its source. Only then can organisations disrupt fraud cycles, minimise risks, and ultimately make it harder for criminals to succeed. In this, contact centres are the first line of defence.

For further information, read the report.

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