To Stop Scams, It’s Time to Add Sensible Friction to Easy Money
The convenience and speed of real-time payments makes it easy for fraudsters to scam individuals. It’s time to consider sensible friction in the process.

As someone who has made a career in the payments industry, I feel a little weird making this bold statement: it has become too easy to send money to other people.
Gone are the days of reaching into my pocket for a wallet, counting out bills or wiggling a credit card free or (if you can even remember these days) finding a checkbook and filling out a paper check. Now, I can practically send, transfer, or pay by accident by simply looking at my smartphone, which can make fraud prevention a real challenge.
Fraudsters love this change and have been scamming consumers and businesses at full speed with all sorts of sneaky, dirty tricks. It’s about time we add some sensible friction to the real-time payment process as we race hellbent-for-leather down the digital freeway.
They Didn’t Teach This in Econ 101
On May 3, the U.S. raced by a milestone when the Fed raised interest rates for the tenth straight time since March 2022 in an ongoing race against inflation. Consumer spending also increased 1.8% in January while prices keep increasing for most day-to-day purchases.
At the same time people are spending like mad, the cost and frequency of scams are rising fast, investment scams in particular. In an investment scam, the scammers pose as a legitimate entity offering something lucrative or luxurious with fake websites that seem convincing. They use sketchy providers who don’t normally work with law enforcement and then phish, smish, email, and robocall the heck out of people. Those that respond are promised fabulous returns in the future for cash up front.
Many folks wonder: who would fall for these ploys? Turns out that a lot of individuals are conned, since Americans reported a whopping $3.8 billion worth of this kind of scam in 2022 – more than double the $1.8 billion reported in 2021.
But the important development isn’t just the growth of impersonation scams. What is most frightening is just how good scammers have become at impersonating legitimate banks in a world of accounts, deposits, and payments that have become very digital, very quickly.
Unsafe Savings?
Since worries about regional bank struggles and an uncertain stock market are driving people with cash to look for safe havens and good interest rates, it pays to be very careful about security as well as who is behind the friendly new banking brand.
It turns out there are hundreds of legitimate new digital banks entering markets worldwide; 10 new digital banks launched in the US in 2022 alone. But if this deluge gives cover to fake new banks to shoulder up next to the legit ones – and I think it can – it is worrisome.
Good impersonators don’t have to sell imaginary timeshares or East River bridges to the gullible. They can attract capital just like real banks and do damage to prudent savers moving precious assets from, for example, an impacted regional bank to a fake one that convincingly poses as legitimate.
Is Sending Money Too Simple?
If there is a common denominator across all the scams, it’s the instant and irrevocable nature of real-time payments. FICO’s latest 2023 Global Scams Survey reported that 90% of all consumers worldwide have sent a real-time payment, 62% use real-time payments more than 5 times per month, and 52% plan to use them even more.
The main reason behind this is nearly 80% of consumers like how easy real-time payments are to use. FICO has recommended 5 specific ways banks can add sensible friction to real-time payments, that also line up with what customers want to help push back against scams.
Our report opened my eyes because 77% of consumers worldwide say they want their banks to implement better fraud detection in general. From my perspective, that should definitely include machine learning to help identify and stop scams, but for customers it’s not about any singular channel, it’s about protecting their money from any kind of thieves.
Are Big Money Transfers Too Easy?
While real-time money transfers are popular, they’re also potentially risky because of just how much money someone can send instantly. With real-time payments limits of up to $1 million for same day ACH in the US and Faster Payments in the UK, and no limits at all for domestic transactions on the Australian New Payments Platform, consumers can find themselves losing life savings in an instant.
Stories abound featuring individuals losing life savings, pensions and more to pernicious scammers. So it’s no surprise that 45% of the respondents in our global scams survey think financial institutions should implement a cooling-off period for bigger payments, and 70% said they would feel positively if their bank stopped a real-time payment because of an active scam.
Customers Want Smarter Fraud Protection
Given that people can now move life changing sums of money so easily – through digital channels like a smartphone or a computer – adding sensible friction back into the payment and transfer processes not only makes sense, it’s also what customers want. As I mentioned above, a majority of consumers worldwide say they would feel positive if their bank were able to prevent a scam payment before it happened, and 65% would like more scam warnings while they make real-time payments.
As much as consumers love to transact in real time, they also like the idea of their banks protecting them from themselves and others all the time, and especially when they are sending, spending, or transferring money.
Putting some sensible friction into high-risk payments, or when customer behavior is different from the norm, can help improve both fraud losses and customer experience. I’ve seen the banks I use take steps in this direction, and I’m impressed by the amount of warnings and checkboxes I go through when I make a transfer, which remind me to pause and consider where I am sending the money.
How FICO Can Help Protect Your Company with Scam Prevention
- Learn about FICO’s award winning retail banking model with scam detection score
- Read the entirety of the FICO 2023 Scams Impact Survey
- Explore how seamless, real-time customer communications can be your secret weapon when it comes to stopping fraud
For more of my latest thoughts on fraud, financial crime and FICO’s entire family of software solutions, follow me on Twitter @FraudBird.
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