Global efforts intensify to combat rising scams

2023 has ushered in substantial changes in the landscape of fraud prevention. Both regulators and industries have geared up to combat the rising threat of scams.

Authorised push payment (APP) fraud, commonly known as scams, caught the public’s attention in 2020. This prompted the industry to shift its focus from detecting unauthorised payments to identifying scams. Innovations in scam detection software by organisations like FICO aimed to assist financial institutions in spotting ongoing scams. Additionally, there has been an effort to educate consumers about scam techniques, particularly in the UK, backed by significant media coverage.

Despite these efforts, the scams industry continues to thrive, fuelled by the surge in alternative payment methods such as digital wallets, bank transfers, and cryptocurrency. Recognising this, several countries are implementing new regulatory rules, some concentrating on data sharing. Others, like the UK, are emphasising liability and reimbursement.

Looking ahead to 2024, a holistic approach to scam prevention is anticipated. Consumer education remains crucial, but as scammers refine their tactics, it’s necessary to recognise the sophistication of their methods. Proposing strategies to enhance prevention efforts includes treating scam victims differently, directing fraud cases to specialised teams, and integrating personalised customer communication.

Synthetic fraud, the fastest-growing form of fraud globally, necessitates breaking down silos in the onboarding processes of financial institutions. The industry sees prioritising the integration of technology for real-time fraud detection with credit originations. This offers benefits such as improved efficiency and a more customer-centric onboarding process.

Regulators are also targeting “upstream polluters,” organisations unwittingly facilitating fraud outside financial institutions. Social media platforms, domain registrars, and telecoms are identified as contributors to fraud. Australia is making progress with a co-regulatory code to combat fraud through collaboration between financial institutions, social media firms, and telecoms.

As the financial toll of fraud globally reaches $5.4 trillion, 2024 is poised to bring significant developments in fraud prevention tools and regulatory focus on wider accountability. Financial institutions face the challenge of staying ahead of fraudsters while navigating regulatory requirements, ethical considerations, and complex legacy systems.

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Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.