Fraudsters Outpacing Fraud Prevention in Faster Payments

As the U.S. begins to migrate to the “faster payments” system that enables individuals and businesses to send and receive payments in seconds, an industry-led coalition of stakeholders has released a report on how fraud is affecting faster payments.

The U.S. Faster Payments Council (FPC) yesterday made the results of its inaugural Faster Payments Fraud Survey and Report publicly available. The group identified the most prevalent ways bad actors are leveraging faster payments in fraud schemes. Faster payments solutions used by survey respondents include same day ACH, push-to-debit-card, RTP payments and Zelle P2P payments or disbursements.

FPC said several themes emerged as it analyzed responses to the survey:

• As banks, merchants and individuals continue to adopt faster payments, fraud is outpacing fraud prevention
• Fraudsters are employing “a multitude” of strategies making data sharing and fraud tool development vital
• About half of respondents have developed new processes or policies specifically for and unique to faster payments

“The fraud prevention role can often feel like a game of ‘Whack-a-Mole’ wherein the organization is constantly discovering new ways fraud has been perpetrated, implementing a solution to eliminate or control for the new fraud event, and the cycle repeats itself in perpetuity,” the report’s authors wrote, in a lament that will be familiar to fraud professionals. “This cycle has not changed with faster payments, but a general perception is that the cycle has accelerated due to the quantity of new solutions entering the market for consumer and business use, and the pervasiveness of fraudsters to capitalize upon nascent solutions to identify their weaknesses for personal benefit.”

FPC said it hopes this report will serve as a benchmark for future annual looks at the fraud landscape within faster payments. To download a free copy of the report, click here.

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