Faster Payments Council: Fraud trends and mitigation opportunities

The U.S. Faster Payments Council (FPC), has published a new industry resource, titled Fraud Trends and Mitigation Opportunities.

Fraud trends and mitigation opportunities

Developed by the FPC Fraud Work Group, this inaugural bulletin is aimed at fostering safer user experiences and bolstering confidence and trust in faster payments.

Fraud Trends and Mitigation Opportunities examines the evolving landscape of faster payments fraud, providing insights gained from the FPC’s prior work and addressing current trends and mitigation techniques.

As faster payment methods gain popularity, so does the associated fraud.

The bulletin sheds light on authorized push payment (APP) fraud, where an authorized party is deceived into sending a payment to a fraudster.

It explores the increasing challenge of combating this fraud, emphasizing the need for education, awareness, and enhanced business workflow on both consumer and business fronts.

“This first bulletin reflects the dedication of the FPC’s Fraud Work Group in addressing the dynamic landscape of faster payments fraud,” says Lee Kyriacou, Vice President, Real-Time Payments at The Clearing House and FPC Fraud Work Group Chair.

“It provides a comprehensive analysis and sets the stage for industry-wide collaboration to strengthen our collective defence against fraud.”

The Bulletin highlights significant gaps in fraud detection, prevention, and mitigation, presenting opportunities for further progress.

Two key gaps identified include:

Gap 1: Differing payment provider processes and technology – the diversity in the implementation of faster payments processes and technology across providers presents challenges.

The bulletin suggests potential opportunities, including the need for standardized coding for fraud reporting, repositioning fraud mitigation approaches for credit-push scenarios, and advocating for a uniform Confirmation of Payee (CoP) capability in the United States.

Gap 2: Limited information sharing – improving information sharing practices emerges as a critical need. The bulletin discusses challenges such as limited fraud reporting requirements, lack of standardized data definitions, and hesitancy among stakeholders to share information.

It calls for collaborative efforts to address these challenges and emphasizes the importance of swift and uniform fraud reporting.

“As we confront the challenges posed by evolving fraud schemes, a unified approach and foresight is crucial,” comments Amanda Compton, Director of Integrated Account Protection at Arvest Bank and Vice Chair of the Fraud Work Group.

“Our bulletin emphasizes the need for industry stakeholders to adopt effective fraud prevention processes and enhance information sharing practices to safeguard the payments ecosystem.”