US-based card company Mastercard has updated its Consumer Fraud Risk (CFR) solution to enhance consumer protection from real-time payment scams.
According to the company, the AI-powered insights provide UK banks with enhanced visibility into potentially fraudulent transactions, allowing them to stop scams before they occur.
Its CFR solution has helped 11 UK banks since early 2023, in identifying and preventing a scam payment before the funds leave the victim’s account.
The AI solution scans multiple data points related to a transaction, providing a risk score to the sender’s bank in real-time.
The UK’s Payment Systems Regulator (PSR) collects payment data from 14 large-scale banks in the UK that are mandated to report.
The new, additional AI enhancements to the CFR solution provide the receiving banks with the risk score within seconds.
It allows the banks to detect when payment may be meant for an account used by fraudsters, also known as a mule account.
In the initial offline tests, the additional ‘inbound risk’ alerts have seen a 60% improvement in a bank’s ability to identify high-risk mule accounts early, within its account base.
Mastercard plans to expand CFR to other markets worldwide, within a year.
Mastercard security solutions executive vice president Johan Gerber Johan Gerber 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.”
Mastercard said that the scams, known as Authorised Push Payment (APP) fraud, usually originate through a fictitious website, email, text message or phone call.
Last year, APP frauds accounted for £460m ($607m) from UK consumers.
Currently, banks are voluntarily returning funds to victims of such fraud.
However, new rules from the UK’s Payment Systems Regulator (PSR) will require banks to reimburse all APP fraud victims, excluding a few exceptions, said Mastercard.
