Mastercard has ramped up efforts to combat payment scams by enhancing a programme that aids banks in spotting fraudulent transactions in real-time.
Kickstarted in early 2023, Mastercard’s initiative has been instrumental in helping UK banks such as Halifax, Lloyds, Barclays, NatWest, TSB, and Monzo among others, to pinpoint and prevent dubious payments before they’re processed from the victim’s account.
The system, powered by state-of-the-art artificial intelligence, scrutinises various data points during a transaction and rapidly provides the sending bank with a risk assessment score.
These types of deceptions, known as authorised push payment (APP) fraud, trick individuals into thinking they are making payments to legitimate contacts, while in reality, they fall prey to elaborate schemes orchestrated through fake websites, emails, texts, or phone calls.
In its latest move to crack down on financial crime, Mastercard has extended their fraud detection service to include the recipient banks, allowing them an opportunity to identify incoming payments earmarked for accounts managed by swindlers.
These illicit funds often pass through “money mule” accounts, where account holders may get a cut for allowing their accounts to be used for transferring stolen money.
Initial assessments of these “inbound risk” alerts have indicated a marked improvement in early identification of suspect mule accounts within the receiving banks’ systems, notes Mastercard.
Johan Gerber, Mastercard’s executive vice president for security solutions, has highlighted the bolstering of bank defences against fraud, stating: “additional lines of defence helping them better identify and stop scams in their tracks”.
At present, a voluntary reimbursement code protects individuals tricked into transferring money to scammers, with many banks subscribing to it and some offering their own fraud refund guarantees.
However, change is on the horizon. From 7th October, a mandatory code overseen by the Payment Systems Regulator (PSR) will come into force, requiring banks to reimburse customers hit by bank transfer scams, unless the customer is grossly negligent.
