Mastercard Enhances Fraud Protection with AI-Driven Updates
Strengthening Consumer Protection Against Scams
Mastercard has significantly updated its Consumer Fraud Risk (CFR) solution to enhance protection against real-time payment scams in the UK. These enhancements enable banks to gain better visibility into potentially fraudulent transactions, using AI-driven insights to prevent scams before they harm consumers.
Understanding the Threat: Authorised Push Payment Fraud
One of the most pressing threats in today’s digital landscape is Authorised Push Payment (APP) fraud. In this scenario, fraudsters manipulate victims into sending money through deceptive websites, emails, text messages, or phone calls. Alarmingly, Mastercard reported that APP fraud resulted in losses of £460 million for UK consumers in 2023.
As it stands, UK banks have the option to reimburse fraud victims voluntarily. However, starting on October 7, new regulations introduced by the Payment Systems Regulator (PSR) will mandate that banks compensate all APP fraud victims, with few exceptions. This regulatory shift highlights the urgency for banks to enhance their fraud prevention measures.
Harnessing AI to Combat Payment Scams
Since early 2023, Mastercard’s CFR solution has been a game-changer for 11 UK banks, helping them identify potentially fraudulent payments before they leave the victim’s account. By analyzing a multitude of transaction data points, the system assigns a real-time risk score, enabling the sender’s bank to take immediate action.
Innovative Alerts and Global Expansion
Mastercard officials acknowledge that fraudsters continuously seek new ways to deceive consumers through fake websites and enticing deals. In response, the company is ramping up its technological enhancements to equip banks with superior tools for identifying and halting scams effectively.
Preliminary tests of the new ‘inbound risk’ alerts indicate a remarkable improvement, as banks can now detect high-risk mule accounts with an average increase of 60%. Moreover, looking ahead, Mastercard plans to expand its Consumer Fraud Risk solution on a global scale. This expansion will not only reinforce consumer protection but also enhance the integrity of the digital financial ecosystem. Consequently, Mastercard continues to take proactive steps to safeguard consumers in an increasingly complex digital landscape.