Authorized Push Payment and Social Engineering: How to Fight Back

 

Authorized Push Payment and Social Engineering Scams

When fraud happens as due to scams and social engineering, businesses will have a difficult time stopping it. This is due to the fact that when legitimate clients fall victim to fraudsters on the internet, for instance, when it comes to the authorized Push Payment Fraud (APP)--the consequences of losses could be devastating, not only for the individual victim but also the business where the fraud occurred.

According to FTC, American consumers have reported losing more than $2.3B to fraudsters in 2021. In the meantime, across the Atlantic, UK Finance revealed that the losses incurred due to authorized push fraud increased by 71% during the first quarter of the year 2021 UK The same report states that the amount that was stolen from this type of scam was even greater than the losses incurred by card fraud.

In the end, financial institutions have to come up with ways to fight the massive losses that are triggered by APP fraud, before they end up to pay the cost.

Protecting Your Organization Against Scams and Social Engineering

Of the many types of frauds that companies attempt to stop fraud, social engineering and scams are a few that pose unique problems. The main reason for this is because the criminals don't interact with the company's digital assets directly. Instead, they communicate with the business through the user who falls for the fraud.

This makes it difficult to identify this kind of fraud prior to it happening since those who fall for scams are able to easily bypass biometrics and authentication challenges because they're using their accounts. Security measures like the multi-factor authentication (MFA) as well as identity verification aren't of much usefulness in this case. Financial institutions have to consider how they can successfully engage directly with the user to stop APP fraud from occurring and also at what point on the path this type of intervention is required.

Layered Defenses and Adaptive Access

The prevention of fraud is usually targeted at two important stages of the user's experience: both at the time of authentication as well as during the transaction. If the person is authentic and can authenticate to their account without difficulty and this leaves an account as your primary security measure. It's common to obtain additional approvals in order for large amounts of money, however this won't prevent a fraudulent customer from making costly error.

It is vital to keep in mind that consumer education is still vital in forming the primary security against fraudsters. However, it is important to note that consumer education is not going to completely remove the problem. Fraudsters can be tricky and smart and even a skeptical customer can be swindled in the event that they are addressed in the right way in the right timing. Therefore, financial institutions need to create an effective second protection plan to protect those instances where consumers are unaware that they have been scammed.

There are many options to tackle this issue and a smart business could implement a number options to offer an enhanced defense. First of all it is important to look at user behaviour throughout all of the sessions. When authenticating and finishing the transaction, users can perform a range of actions like making adjustments to their profile, or even viewing and altering PII. Although most biometrics based on behavioral focus on separating legitimate users from those taking over accounts however, a genuine user might be able to exhibit unusual behavior due to the influence of a scammer. If the fraud detection and risk detection tools are in operation during the user's session there is more opportunity to identify these irregularities and take the appropriate action.

However, to stop this kind of fraud, it's not enough to just focus on detection. Instead, financial institutions have to figure out an effective way to stop the fraud and force the user to be more aware of their actions. This is more difficult to say than done, however it can be achieved by altering the user's experience according to the perceived risks. Instead of making the request for MFA on top of an untrustworthy transaction, it's better to confront your user's thinking in a new manner to make them consider the actions they take.

Most often, the person who is committing the fraud has already made significant efforts in order to make the user believe in them, however the victim can be forced to doubt their trust. People who seem to be in danger of approving a fraudulent transaction may be steered down a different route: instead of having immediate acces for the "transfer" button, it may be sufficient to provide the user with a warning message that alerts them to possible fraud. It asks them a series of questions about the way they're able to identify the person who is paying, if they're sure of the amount they're paying and so on.

Sometimes, urging the customer to stop , and think about it will stop the payment from going through.

Technology Change vs. Policy Change

The majority of companies have several counter-fraud strategies and tools in place. Fraud prevention generally is multi-faceted and includes new security measures over existing ones to stay up-to-date with new methods and techniques used by fraudsters. However, the process of adding new technologies or making major changes to existing tools takes time and money as well as various approvals.

This is due to the fact that changes control procedures and management can be extremely rigid, putting banks in tough situation. Fraudsters are not weighed down by other institutions and are able to move quickly, leading teams of fraud to feel that they're not able to keep up. Knowing the tools to stop scams as well as social engineering, and using them are two distinct things.

Financial institutions can overcome this particular problem by moving their fraud policies from individual applications to a central fraud hub, which allows rapid and simple policy changes without the use of code. With this system in place, fraud departments can modify their policies in response to fraud in a variety of methods, including mitigation options which do not rely as much on the standard tools such as MFA and identity verification, and more on different types of problems. The benefit of this strategy is that it's simple to monitor the effectiveness of these policies, evaluating and tweaking as needed in real-time.

Ping's Integrated Approach to Stopping Scams and Social Engineering

Social engineering and scams are challenging to combat But the proper combination of strategies and tools can guarantee that your business is up to the challenge.

Ping Identity takes an integrated method to preventing fraud that combines tools for fraud detection, decision-making mitigation, orchestration, and detection all within one system. Our fraud orchestration and decisioning tools enable organizations to combine fraud signals from a range of sources such as Ping's own detection tools and third party ones. They also then build out policies that provide flexibility in mitigation at any time through the user experience. Implementing and testing new policies in the decision building hub can be simple and simple, and our fraud prevention specialists are prepared to share their expertise in preventing loss due to fraud. APP frauds as well as social engineering.

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