3 Best Practice Tips for Fraud Managers to Stop Scams

Fraud expert Matt Cox explores how to protect customers from scams

With criminals successfully stealing over £455 million through scams in the United Kingdom and more than €242 billion across European countries over the past two years, scams are not going away and consumers are still sending out money unknowingly to criminals every day. This is an extremely challenging and growing problem for fraud managers.

Tip #1 – Communicate Directly with the Customer

You have provided education materials to your customers on how to spot a scam and not fall victim to a fraudster in the past, but you come across unusual behaviour payments everyday – and your customers are still sending money to fraudsters for a deal that is too good for them to ignore!

Another approach is to communicate an informative message to the customer directly when your fraud analytics recognizes behaviour that is out of sync with their normal spending. The message could contain educational statistics or best practices they should be aware of when purchasing goods, or sending money to someone they don’t know. By sending a direct message to them, it may prompt them to do a bit more research on the company or person that they intend to send money to.

In the same message you could provide them with some options to:

1. Delay payment for a certain amount of time

2. Cancel the payment  

3. Allow the payment. This would allow the customer to directly confirm their intent of the purchase or payment.

Tip #2 – Use Network Analytics to Uncover Mule Rings

Adverts targeting young adults with the messages of ‘quick and easy money’ or ‘get rich quick’ have increased over time and are commonly found on social media. The Dedicated Card and Payment Crime Unit (DCPCU), a proactive task force formed as a collaborative effort between UK Finance, the City of London Police and the Metropolitan Police, took down 500 social media accounts in 2019 that were set up to recruit young people as money mules.

Fraud rings that target mules are usually organised fraud rings. It would be very difficult for you, as a fraud manager, to detect mule activity if you did not have Network Analytics capabilities.

By using Network Analytics, you would be able to uncover relationships that would highlight typical mule activity where several of your customer accounts are sending money to the same account. Network Analytics can also identify cases where one of your customer's accounts is receiving money from an unusually large number of people or for atypical transaction amounts.

Tip #3 – Use Contextual Data Services

Fraudsters will move from person to person and bank to bank, using the same schemes, devices, IP addresses, etc., to sustain their income from scam fraud.

Fighting fraud with only your data can be challenging. Combining your data with data from third parties provides you with more opportunities to fight scams.

You can obtain known mule account numbers, fraudster phone numbers used, device IDs that are associated with fraud and IP addresses commonly used to perpetrate fraud. These are just a few examples of data elements that are available for you to incorporate and use for accurate decisioning on payments made by your customers, to known criminals.

I hope you found these tips helpful in assisting you in stopping your customers becoming the victim of scams. I also suggest you read the post “8 Tips for Pivoting Your Fraud Strategies During These Unfamiliar Times” for more insights on pivoting your fraud strategies. You may also want to review the capabilities in FICO® Falcon® Platform for fighting scams.

Learn more:

In my next post, I’ll explore the use of machine learning to fight fraud scams.

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