Fraud detection

The Cooperative Bank in Massachusetts is working with the tech startup Carefull to monitor accounts for signs that older clients are being swindled by scammers — including people close to them.

Account takeovers and ATM skimming are rampant in cities like Las Vegas and New York. Meanwhile, scammers are targeting travelers as they attempt to pay airlines, cruise ships, car rental companies and hotels.

In many cases, stopping fraud in the moment is costly — and any transactions a bank flags incorrectly could alienate its best customers, a Bangor Savings Bank executive said at American Banker's Card Forum.

The card network is bringing Verizon into its innovation lab to turn more phones into payment acceptance devices and use the growing number of consumer gadgets and digital assistants to better verify consumer identities.

The company angered hundreds of customers when its software flagged their accounts as suspicious and suddenly cut them off, according to a ProPublica report. The episode illustrates the challenge shared by fintechs and banks of rooting out scammers without being overzealous.