Heeding fraud warning signs to prevent larger losses

Fraud rarely announces itself with one obvious event. It could start with a small, unfamiliar debit card charge or an urgent wire request. Those warnings may reach different teams or even a vendor. Without holistic visibility, that separation gives fraud room to grow into a more serious attack. To successfully battle these attacks, community banks need one connected response across cards, payments, cybersecurity, operations and frontline teams.

Uncovering the underlying pattern behind the losses helps financial institutions prevent future attacks. A card test, a phishing email and a payment request can appear in different systems while belonging to the same attack. Teams need a way to connect those signals before individual small tests turn into a significantly larger loss.

The sooner the silos between teams break down, the better their chance of stopping the activity before the fraud web gets too tangled.

Don’t Ignore Small Fraud Attempts—They’re a Test

Small fraud attempts often get written off as mistakes, but overlooking them can give cyberthieves a green flag for bolder actions. These small-dollar charges are known as card testing, when the holder of stolen card info makes small purchases—often $1 or less—to verify which cards still work. However, victims don’t need to have their card info deliberately stolen as a one-off hacking attempt to fall prey.

These smaller fraud amounts add up quickly across thousands of accounts. Alloy’s 2026 State of Fraud Report found that 22% of financial institutions and fintechs lost over $5 million to fraud in 2025. Another 45% reported losses between $1.5 million and $5 million. Together, these numbers become significant.

The sooner the silos between teams break down, the better their chance of stopping the activity before the fraud web gets too tangled.

Once the pattern appears, there are four steps to take in response:

1. Slow the attempts. Apply velocity checks and rate limits.
2. Confirm the pattern. Look for spikes in declines, low-dollar attempts and repeated BIN activity.
3. Contain the range. Temporarily limit affected BINs while investigating.
4. Reduce future risk. Review card-number patterns and establish clear escalation and reporting processes.

Visa recommends velocity controls and other measures to disrupt automated testing, with alerts shared across fraud monitoring teams.

Draft Plans Before a Cyberattack Becomes a Payment Crisis

A cyberattack doesn’t stay confined to a specific system for long. Ransomware and phishing can expose credentials and pressure employees into approving fraudulent activity.

Make ransomware decisions in advance

Ransomware locks up systems, blocking access to or encrypting data, often followed by a hefty payment demand. You don’t want to make those critical decisions under pressure. Be ready before an incident occurs by preparing your response in these four stages:

1. Prevent and detect. Patch systems, train employees, require multifactor authentication, limit access and monitor for threats.
2. Protect recovery. Maintain offline, encrypted backups and regularly test restoration processes, as recommended by Cybersecurity & Infrastructure Security Agency (CISA).
3. Make decisions early. Establish roles, payment authority and legal and OFAC sanctions review before an incident occurs.
4. Report on time. Banks generally have 36 hours to notify their primary federal regulator, while federally insured credit unions generally have up to 72 hours.

Spot spear phishing when it’s built to look legitimate

Phishing messages try to persuade someone to share information or take an unsafe action. Spear phishing is more targeted. It may reference a real executive, vendor, payment process, or business relationship to make the request seem legitimate or routine.

When someone reports a suspicious message, here are four steps to take:

1. Isolating and resetting. Disconnect affected devices and change potentially compromised passwords.
2. Assessing and containing. Determine what the person opened, shared or approved, and review security monitoring tools and logs for related activity.
3. Alerting the appropriate people. Notify IT and cybersecurity, then involve finance, legal, outside forensic specialists and the cyber insurer as needed.
4. Closing the gap. Fix the weakness, run targeted simulations, strengthen email filtering and authentication, and verify payment changes through a separate channel.

Don’t investigate the message and the payment activity separately. A compromised email and an unusual transaction may be part of the same incident, so don’t overlook the signals.

Help Account Holders Break the Urgency Cycle

Technology alone can’t stop every scam. Social engineering uses fear and urgency to push account holders into acting before they verify a request.

You can help your account holders by reinforcing these two simple habits:

• Do not respond to unsolicited messages. Unexpected texts or investment pitches may be the start of a scam. Block the sender rather than respond.
• Verify unexpected calls independently. If a caller claims to be from the financial institution, hang up and call the number on the back of the debit card.

Offering clear guidance and education to account holders gives them a practical way to stop the attack before money leaves their account.

Build Resilience Across Every Channel

We’ve seen how fraud can disregard the lines between payments, cybersecurity, operations, vendors and frontline teams. Be sure to craft your response so that it doesn’t depend on those lines either.

Whether the first warning is a card test, phishing message or unavailable digital service, your team needs to know its next steps to protect your institution and its customers. Build confidence through tools that increase their visibility across channels and give clarity on what occurred, and how to contain and remediate the exposure quickly.

No financial institution will catch every attempt. Being prepared in advance with clear ownership, practiced response steps and timely information will give teams a better chance to stop one incident before it spreads across systems or payment channels and becomes a much larger issue to contain.