Bank Fraud Rise: Insider Jobs & Poor Waste Management Practices

All financial institutions risk malicious insiders using access to an organization’s secure areas and sensitive materials to break the law. As economic anxiety ensues, the rise in bank fraud continues to skyrocket, with scammers impersonating banks and lenders, and targeting personal and business banking customers. COVID downtime and desperation have resulted in more unscrupulous tactics for insiders to uncover your customer’s data. We’re seeing an increase in thieves mining financial institution waste, both paper, and e-waste.

We know financial institutions have their front-line FTC (Federal Trade Commission) and FDIC (Federal Deposit Insurance Corporation) protocols in place. Most banks feel like their protocols are adequate. But the administrative teams that draft these policies and procedures don’t know all of the risks happening on the back end of their waste management protocols.

Our waste-insider knowledge is here to help financial institution administrators rise above the status quo and deliver even higher customer security. It’s paramount to get ahead of the curve on the influx of waste-related fraud — to save your team and your bank from a cascade of unfortunate events.

Here’s what all bank administrators need to consider when conducting waste protocol and procedure meetings.

Lagging waste management practices are leading to breaches in security

Since COVID, many industries have made cutbacks across the board. Cutbacks, while vital for a business’s survival, have put security at greater risk due to lower waste management standards. We have seen this backfire by an increase in poor handling of sensitive waste. Janitors are increasingly taking responsibility for trash removal and transport. This unlicensed trash hauling is causing a flurry of security issues.

This unfortunate practice has resulted in bank trash ending up in random parking lots and the dumpsters of neighboring businesses. Not only is this embarrassing for the bank as a brand, but it backfires in costs when customer data is unintentionally exposed.

Contractors and janitors need more scrutiny than ever before

Financial crimes have increased as more burglars switch to fraud post-COVID. Hiring a janitorial company is often a very rigorous process that involves high scrutiny and background checks. But as contracts lengthen and trust builds, employees change out, and new staff rotations come in. We’re experiencing more of an increase in cutting corners and lax practices on waste and safety, especially since COVID. Whether it’s saving on direct costs or staff, cutbacks that have occurred for many financial institutions have meant an opening of vulnerability to threats like security and data breaches from both paper documents and e-waste.

As burglars turn to fraud, they look for vulnerabilities and possible opportunities to become an insider and gain access. In a report by Carnegie Melon University, dangers of insider threats were exposed:

“For more than a year, a contract janitor stole customer account and personally identifiable information from hard-copy documents at a major U.S. bank. The janitor and two co-conspirators used this information to steal the identities of more than 250 people. They were able to open credit cards and then submit online change-of-address requests so the victims would not receive bank statements or other notifications of fraudulent activity. The insiders drained customers’ accounts, and the loss to the organization exceeded $200,000.”

Certificates of destruction for e-waste are often bogus

Those data deletion contracts you have with your e-waste provider might be in breach. There’s a growing issue of e-waste companies handing over certificates promising to destroy sensitive data and often never hiring for these positions. What happens is that large bins of e-waste, including computers and hard drives, are picked up by e-waste companies, end up in a crate, are sorted, and shipped directly to the buyer. What’s missing is the step where your certificate is validated by wiping sensitive information on hard drives, as promised.

There are many risks:

  1. Janitors should not be transporting e-waste to collection sites, even if they deliver a destruction certificate.
  2. E-waste employees who are not compensated well are enticed to share sensitive data for malicious use.
  3. Waste certificates are only good if you have verifiable proof that data has been wiped and that all data was destroyed from equipment.

Recommendations for the future of bank waste security

Follow local, state, and federal laws on proper waste management practices. Even if you think your financial institution has a handle on waste, contact a professional to uncover the holes in your protocol and see where your bank can leverage ESG goals to improve processes beyond the status quo. It’s not enough for your janitorial company to be licensed and bonded if their staff commits fraud. To prevent insider attacks, janitors should never be responsible for transporting waste. They are not licensed to do so. Only licensed haulers should be removing and transporting waste off-site to appropriate waste facilities

Don’t cut corners on waste management. For any institution that handles sensitive customer data, cutting corners to save money on waste is proving to cost more in the end.

The most trusted partner in waste management

At National Waste Associates, we help banks go above status quo waste management practices. We help secure facilities by minimizing waste-related threats from insider jobs. We respect janitors’ critical role in cleaning and upkeeping financial offices but know that waste removal becomes risky when left to janitorial staff.

Let our team of experts support your financial institution with our vast network of fully licensed haulers, sustainability, and compliance services. We’ll help guide you on best practices with respect to verifiable data destruction, e-waste removal, and secure document shredding. Success is in our DNA – we’ve worked with large national banks saving them nearly 50% on waste costs. Click here to see our case study: “National Waste Associates Halves Disposal Project Budget for Major Bank”. Our clients hold in high regard our high standards for security and bank waste protocol. Let your team leverage our integrity on waste.

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