Erine Lewis is the head of risk management at People’s Credit Union in Middletown, where she oversees the institution’s Bank Secrecy Act, Anti-Money Laundering and the Office of Foreign Assets Control Compliance Program.
During her 17-year career in banking, Lewis has become a recognized expert in battling fraud. She has extensive experience in financial technology and previously worked at FiServ, the $74 billion financial services company, as the company’s senior BSA consultant and AML specialist.
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PBN: As head of risk management, fraud prevention and detection, what is occupying most of your time?
LEWIS: We are experiencing the most dramatic increase in fraudulent activity that we’ve ever seen. Check fraud is up over 100%. It’s so bad that the United States Postal Service is advising everyone to not send checks through the mail. It’s been a wild year and a half since COVID. Nationally, the number of checks stolen from the mail rocketed to 680,000 last year. That’s up from 350,000 in 2021.
PBN: How does that happen and what can people do to prevent becoming a victim?
LEWIS: The checks are intercepted. People pay a bill and put it in their mailbox with the flag up. Then someone comes along, sees the flag and steals the mail. We file cases any time this happens, and we’ve been filing reports nearly every day. We also recently had an incident where the blue USPS mailbox on West Main Road was broken into.
It’s difficult for me to say unilaterally that you shouldn’t use checks. But if you must, the safest way is to write them using a gel pen rather than a rollerball. If you use a gel pen, the ink sinks into the fiber of the paper so that its more difficult to “wash.” Thieves use acetone or another household chemical to lift the ink off the check and rewrite it for a different amount. With a gel pen, it’s more difficult to remove the payee line and the amount. Also, don’t use the flag on your mailbox. We know of people who have traveled up from New York to look for those flags and steal the mail inside. If you have to send a check, go to the post office.
PBN: Why has this check washing grift taken off?
LEWIS: Compared to burglary or armed robbery, it’s a very low-risk crime. Criminals have transitioned to it because there’s no violence and there is less jail time if they’re caught. Overall, it’s easier for them. There are videos on YouTube showing how it’s done.
It’s happening everywhere. We’ve been relatively lucky here in Rhode Island, where the amount of financial crime is significantly less than you’d find in more-populated areas. What we’re experiencing isn’t on par with them, but it’s far greater than it had been. We didn’t have people travel here to steal our mail five years ago.
PBN: What else does People’s do to prevent fraud and what tools do you use?
LEWIS: We analyze trends in transaction activity – deposits and withdrawals – to look for [out-of-the-ordinary] patterns or potentially suspicious activity that could indicate tax evasion or money laundering. It comes down to knowing your customer and knowing what is typical for them or what is not. Like most financial institutions, we use Verafin, which is the top-of-the-line tool for detecting fraud. Verafin uses a lot of artificial intelligence and modeling, and it’s great.
We used to do all the analysis manually. That changed about 2012 and 2013, when everyone migrated to automated software to assist with sorting through all the financial transactions. It does a great job filtering through the noise and pointing us to what’s really relevant. It’s streamlined things so much.
PBN: What can businesses do to prevent scammers from targeting them?
LEWIS: Businesses and consumers face a similar set of challenges. For commercial entities, it’s usually through their email. Someone in the company clicks on an attachment and the system is compromised. The scammer then can see their logins, get tons of information and initiate transfers from company accounts to themselves. Sometimes a scammer sends an invoice with a new account number. An employee pays it. And then, poof, the money is gone.
I recommend every business have strict controls around company email and their servers. It’s so important to teach all of your employees. A few months ago, one Rhode Island town had its entire payroll information compromised. That’s why you should never click on links when you’re on the work network. You have to be constantly patching and testing to make sure someone can’t get on to your network.
Phishing is huge and has gotten a lot more sophisticated. It used to be you could suss out a fake email because of spelling and grammar errors. Now scammers are using ChatGPT and it’s much more difficult to tell.
Sam Wood is a PBN staff writer. Contact him at Wood@PBN.com.
