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.

Financial firms can minimize the damage by understanding where key threats lie, educating employees and customers about phishing scams, and breaking down silos between compliance, fraud and security teams.

The card network is connecting its Enhanced Authorization system with products from Accertify, Microsoft and Riskified, providing Amex with more data at the time of the transaction.

The companies are working to thwart abuse on the Honey platform, a deal-finding system that PayPal acquired in 2019.

As both e-commerce and payment fraud accelerate, Sift is strengthening its digital protection platform by acquiring Chargeback, a real-time dispute management provider.

The purchase is one of several moves the payment company has made to improve its identity expertise.

The San Francisco-based technology provider raised $70 million in a Series C round this week, bringing its total funding to $114 million.

Data from Sift and the FBI show how methods scammers adapted during the pandemic.

Transaction fraud and money laundering are typically siloed areas within banks, but both require a keen eye to finding the right patterns.

CMSPI estimates that retailers lost about $30 billion in potential online sales last year from e-commerce transactions that were declined for a variety of reasons including fraud, insufficient funds, technical problems and errors.