Dan Holmes, Director, Solutions Consulting EMEA at LexisNexis Risk Solutions comments on the UK’s growing ‘Authorised push payment’ (APP) fraud challenge, following the latest fraud announcement from UK Finance:
“Authorised push payment (APP) fraud grew exponentially in what was an unprecedented 2020.
One undeniable impact of the pandemic was the accelerated increase in online adoption. However, an untimely consequence of this growth was that those consumers forced online did not always possess the technical savviness required to stay safe. This opened the door for fraudsters; at an elementary level, more customers online means an increased opportunity for APP fraud.
Fraudster messaging also became more sophisticated, compounding the problem. APP frauds are carefully planned, well-timed operations, often using current events, such as COVID-19, as the convincing element.
This amplified opportunity and ever evolving sophistication means the rise of APP fraud continues and looks unlikely to stop. 2021 is most definitely the time for banks to double down on their efforts to keep customers safe. This is not a simple problem to solve and requires a multi-pronged approach of technology adoption, analytics, operational capability, and targeted education & awareness messaging.”
Kate Dunckley, Senior Solutions Consultant at LexisNexis Risk Solutions comments on the UK’s growing ‘Card Not Present’ (CNP) fraud challenge, following the latest fraud announcement from UK Finance:
“Every year I wait with bated breath, when UK Finance are about to publicise the annual fraud numbers as the findings contained within are always insightful and tell us a lot about the current payments’ ecosystem and its changes. This year even more so as the COVID-19 pandemic has changed the habits of many consumers as well as fraudsters.
According to the latest figures presented by UK Finance the overall value of Card Not Present fraud against the total fraud value in the UK has increased by 3% over the previous year; the average case value however seems to have decreased by approximately 14%. This drop suggests that fraudsters using stolen credentials are distributing the usage quite evenly and potentially mimic the genuine customer’s behaviour, which is becoming more complicated to detect by card issuers.
It also is not surprising that the total volume of Card Not Present fraud has increased in 2020. In fact, it is up by 12% in year on year!
Last year has also seen the biggest ever increase in remote purchase fraud as it constituted 85.3% of all card fraud reported. That is a staggering number showing not only the consumer trends, who are exposing card details online by exploring e-commerce channels (partially by choice, however pushed into this especially by the global situation), but also the virtual hiding places for online fraudsters, who cash out quickly using stolen card credentials.
Detection of Card Not Present fraud is becoming increasingly complex as the extremely fragile card payment risk models need continuous and as real-time as possible updates. And from the latest UK Finance fraud report we could infer that the global pandemic might have flattened some of the previously well-performing models, therefore highlighting the need for even more focused approach and enhanced analytical capabilities improved by additional data points.”
