Mastercard has updated its AI-powered Consumer Fraud Risk (CFR) solution to improve consumer protection from real-time payment scams.
These enhancements come in the form of additional AI updates to Consumer Fraud Risk, which aim to provide a risk score to banks receiving payments within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account.
Early offline testing of the new ‘inbound risk’ alerts has shown a 60% average improvement in banks’ abilities to detect high-risk mule accounts within their account base at an early stage.
Before these updates, the solution has been helping UK banks recognise and prevent fraud since 2003. It works by scanning multiple data points associated with a transaction, providing a risk score – in real-time – to the sender’s bank.
Johan Gerber, Executive VP of Security Solutions at Mastercard, said: “Fraudsters have long sought to deceive the consumer through scam websites and fictitious deals. That’s why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defence – helping them better identify and stop scams in their tracks.”
This announcement comes at a pivotal moment in the UK payments industry, as it prepares for two significant pieces of regulation. These are aimed at preventing Authorised Push Payment (APP) fraud, a type of fraud that is sparked by a fictitious website, email, text message or phone call – and saw UK consumers defrauded out of £460m in 2023.
Banks will welcome this technology as once the regulation comes into play on 7 October, they will be required to reimburse all APP fraud victims, except for limited exceptions – something that is currently voluntary.
While discussions are still ongoing, the current proposal suggests that banks may be required to reimburse up to £415,000, with the cost split equally between the sending and receiving firms. This limit has faced significant criticism from payment providers.
