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The rise of the scammer - how can banks turn the tables?

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All of us are familiar with scamming attempts, we have been receiving fake emails which attempt to deprive us of our hard-earned cash pretty much since the dawn of the internet. The majority of these would-be frauds were hilariously crude and badly constructed communications.

But the world of scamming has come a long way since the dawn of the Internet, and today’s scammers are a different, more sophisticated breed. Scams account for £2.3bn losses in 2021 and total losses are growing at a rate of 33% a year*. The unfortunate reality is that more and more people are getting duped by scammers because their methods play on our instincts and vulnerabilities. Scammers convince people by exploiting our emotions, using technology to convince us they are legitimate, and applying time pressure.

Scams account for £2.3bn losses in 2021 and total losses are growing at a rate of 33% a year* - The Guardian

Every day, these criminals coerce all sorts of clued-up people into sending substantial sums, by tapping into our fear of loss and our drivers for opportunity, or even for love. They invest heavily in infrastructure which is designed to deceive us and have large teams of back-office staff who work to convince us they are legitimate banking employees or members of a start-up looking for an investor. There are now a dizzying array of different scams which fraudsters are operating, each of which has been expertly crafted with the specific goal of extracting cash from unsuspecting members of the public. Operating at scale using stolen and illicitly obtained data, scammers are quite simply a force to be reckoned with and public education programs will not suffice by themselves to protect consumers from the inevitable rise of this kind of fraud.

Banks are working hard to prevent scams and fraud with some banks working together to address fraud detection and prevention. However, as well as using existing rule-based fraud prevention measures and systems the banks need real time behavioral biometric solutions to prevent fraud and scams.

Taking the fight to the fraudsters

Most scams leverage a form of time pressure which coerces victims to act on the spur of the moment, because they have been led to believe that either their savings are at risk or they need to act quickly to exploit a once-in-a-lifetime opportunity. This gives the victim little time to reconsider and provides the banks with nothing more than the victim’s in-the-moment actions to help them detect the crime. By definition, unlike almost all other forms of financial crime, scams do not involve a third party interacting with bank systems or websites. With scams, it is the customer who actions money transfers and payments – there is no direct interaction between the fraudster and the bank – so the traditional databases used by banks to identify fraudulent accounts, networks and IP addresses cannot help them to detect scams.

Banks need a new way of working if they want to stop their customers falling victim to these scams. In short, they need in-depth customer profiling to detect unusual behavior which is a tell-tale sign that they have been duped. And to stop a scam in its tracks, they need genuine real-time capabilities which enable the instant recognition of abnormal customer behavior, combined with the ability to shut down or suspend the money transfer.

Celebrus FDP captures and leverages granular customer behavioral data to detect anomalous interactions which indicate foul play

Celebrus FDP captures and leverages granular customer behavioral data to detect anomalous interactions which indicate foul play. Our sophisticated and highly specialized behavioral scoring mechanisms automate the analysis of all customer interactions in real-time to identify scams before victims transfer any money. And Celebrus FDP’s real-time connectivity enables scam signals to be connected to downstream applications to inhibit the transfer of funds, which enable the bank to intervene to double check suspicious transfers.

Find out more about how Celebrus FDP can protect your customers from scams, while maintaining a frictionless customer experience throughout all their banking interactions. Speak to our knowledgeable sales team about how Celebrus FDP can help you catch the fraudster before the fraud.

*https://www.theguardian.com/money/2021/jul/15/more-than-23bn-lost-in-a-year-as-scams-surge-during-pandemic