Professional criminals using artificial intelligence software and stolen personally identifiable information to conduct scams against consumers worldwide are forcing financial institutions to take unprecedented actions to protect their customers. This can include interrupting a request by a valid customer to move their own money from one bank account to another.

Account-to-account (A2A) transactions have been a relatively unprotected payment channel, but their increasing popularity and their real-time funds settlement has attracted sophisticated criminals. Often scams involve the promise of romance or big gains in an investment scheme. Investor scams are fewer in number, but the monetary losses are higher.

In the UK, it is believed that someone falls victim to a scam every 12 seconds. That number is almost certainly underreported because of victim shame.

To combat A2A scams and card-based fraud, Mastercard launched Scam Protect, a suite of AI-powered identity, biometric, open banking and AI capabilities to protect consumers and the financial institutions that issue them cards and hold their accounts. Specific to A2A payments, Mastercard Consumer Fraud Risk, part of Scam Protect, allows banks to intervene in real time and stop a payment to a criminal before funds are sent. There are 10 banks in the UK that are using Consumer Fraud Risk.

Mastercard is collaborating with organizations including Verizon and the Global Anti-Scam Alliance. Mastercard and Verizon will work together to design new tools to block scammers.

Because bank customers are emotionally motivated to move their own money, protection methods such as two-factor authentication, one-time passwords and identity verification procedures are often knowingly circumvented. Sometimes fraud victims are so determined to transfer the funds that they are not receptive to fraud warning messages and might even feel like the criminal deserves the money they are going to send. This friction with a customer presents a dilemma to financial institutions.

Scam Protect’s machine learning and AI are used to identify the signals of a victim who is being defrauded using device intelligence and behavioral biometrics. Those signals could include hesitation while typing on a website or in an app— sometimes because the victim is being coached over the phone by a criminal.

The Scam Protect suite of specialized solutions sends scores and risk signals to financial institutions. What financial institutions also need are tools in the form of online prompts to intercede with customers and slow down the initiation of an A2A transaction suspected to be fraudulent. Some transactions might even require a phone call advising that they may be moving money at the behest of a criminal.

Future development will allow Mastercard to also provide insights to the receiving bank to monitor inbound payments and to detect potentially fraudulent activity.

Scam Protect is available through Mastercard, as well as via direct integration with the fraud platforms of financial institutions and via third party fraud prevention providers.

INTERVIEWED FOR THIS ARTICLE
Chris Reid is EVP, Identity Solutions at Mastercard in Purchase, New York, chris.reid@mastercard.com, www.mastercard.com.