US FPC publishes Fraud Trends and Mitigation Opportunities

Woman sat at a desk looking at her phone with a digital lock.
Image licensed by

The US Faster Payments Council (FPC) has shared a new industry resource bulletin titled ‘Fraud Trends and Mitigation Opportunities’.

The FPC published the new industry resource to provide insights gained from the member organisation’s prior work as well as address current trends and mitigation techniques.

As part of the current trends section, the bulletin highlighted authorised push payment (APP) fraud, which is when an authorised party is deceived into sending payment to a fraudster, exploring the increasing challenge of combating this type of fraud as ‘there has been an increased focus over the last several years’.

Last year, the FPC underlined the threat of fraud as it said that instant payments continue to have a significant impact on the US ecosystem, explaining that it is ‘key for financial institutions to understand how messages and money are exchanged within instant payments schemes’.

Lee Kyriacou, Vice President, Real-Time Payments at The Clearing House and FPC Fraud Work Group Chair, commented: “This first bulletin reflects the dedication of the FPC’s Fraud Work Group in addressing the dynamic landscape of faster payments fraud.

“It provides a comprehensive analysis and sets the stage for industry-wide collaboration to strengthen our collective defence against fraud.”

Unauthorised payment fraud is also mentioned in the current trends section, which are payments that are initiated by parties that are not authorised to conduct them. The FCP has described this type of fraud as an ‘ongoing risk’ and that account takeover (ATO) is the most prevalent type. 

Amanda Compton, Director of Integrated Account Protection at Arvest Bank and Vice Chair of the Fraud Work Group, said: “As we confront the challenges posed by evolving fraud schemes, a unified approach and foresight is crucial.

“Our bulletin emphasises the need for industry stakeholders to adopt effective fraud prevention processes and enhance information sharing practices to safeguard the payments ecosystem.”

In addition to the two prior mentioned sections, the bulletin has highlighted significant gaps in fraud detection, prevention and mitigation that present opportunities for further growth. The two key gaps identified are:

Gap 1: Differing payment provider processes and technology – the diversity in the implementation of faster payments processes and technology across providers presents challenges. The bulletin suggests potential opportunities, including the need for standardised coding for fraud reporting, repositioning fraud mitigation approaches for credit-push scenarios, and advocating for a uniform Confirmation of Payee (CoP) capability in the United States.

Gap 2: Limited information sharing – improving information sharing practices emerges as a critical need. The bulletin discusses challenges such as limited fraud reporting requirements, lack of standardised data definitions, and hesitancy among stakeholders to share information. It calls for collaborative efforts to address these challenges and emphasises the importance of swift and uniform fraud reporting.

Reed Luhtanen, FPC Executive Director, concluded: “The Faster Payments Council remains dedicated to laying the groundwork for successful industry-wide efforts to combat fraud.

“This bulletin not only outlines current trends and challenges but also serves as a call to action for industry participants to actively contribute to ongoing efforts in preventing, detecting, and mitigating faster payments fraud.”