Do faster payments mean faster fraud? Not necessarily, with education and awareness.
posted on Friday, November 13, 2020 in SHAZAM Blog
When we hear “faster payments,” many of us might jump to the idea that it means faster fraud. That may not necessarily be the case. Faster payments allow for the transmission of the payment message and the availability of “final” funds to the payee in real time or near-real time, on or close to a 24/7 basis. Understanding the fraud themes and trends we see today will help us anticipate the trends that may occur in the faster payments ecosystem.
Many of the fraud trends we anticipate with faster payments are trends we already see in varying aspects of the payments industry. Fraudsters have exploited, and will continue to exploit, personally identifiable information (PII) and machine learning to evolve their own attack strategies. Here are some of the most common methods fraudsters use:
- Account takeover (ATO) is often seen in the form of phishing attacks or “man in the middle” attacks to steal credentials and reset account passwords.
- Synthetic identity fraud is one of the fastest growing types of financial crime in the United States. Fraudsters often use a combination of PII, such as name or Social Security number, and fake information to create a new, believable identity.
- Fraudsters don’t always attack technology, but instead attempt to deceive an individual into action using social engineering. Fraudsters often use this method to trick or intimidate individuals into revealing information. As technology evolves, humans become the weakest link when it comes to fraud prevention.
Our best means of fraud mitigation are education and awareness. Properly trained staff and well-informed cardholders offer the best protection against these types of attacks. But this should be ongoing. Customer education isn’t one and done. Fraud trends are changing constantly, and open communication and consistent education are key to staying ahead of the game.
Fraud isn’t new to the payments landscape, and with the introduction of a new faster payments channel, we can expect fraudsters to do what they do best — exploit and manipulate any weaknesses in the ecosystem. Understanding the trends we see today will help us plan and prepare for faster payments. Ryan Dutton, SHAZAM fraud operations manager and a member of the U.S. Faster Payments Council Fraud Information Sharing Work Group committee, reminds us, “Fraud exists in payments today. Faster payments won’t likely show us new fraud, rather just the same bad actors, trying their same tricks.”
SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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