How to Keep Payment Frauds at Bay?

Mobile Payment Fraud Prevention

Skimmers & cybercriminals are some of the terms used for fraudsters, who are responsible for payment frauds. Such criminals strip the funds, property, and crucial personal information of victims. Generally, three scenarios can result in payment frauds. First, being stolen / lost goods; second being unauthorized transactions on Internet; and lastly false requests for refund or similar scenario. The main reason of these being prevalent factors for online frauds is the immense boom in e-commerce sector, which majorly relies on online payments for selling / buying of goods.

There is various modus operandi or interactions that the fraudsters follow for acquiring sensitive information and make an online fraud possible. The popular ways are Email, instant messaging, online auctions, phone calls, rerouting internet traffic to fallacious websites and lastly by sending text containing malware to smart phones. Since everything is online nowadays, there are an increasing number of gaps or patches or glitches in some online systems. These are the weakness, which is targeted by the cybercriminals. Even if there is firewall, which is not updated as per new technology, then also it can be explored by fraudsters to steal user’s sensitive data and make payment fraud a possibility.

There are some ways by which you and e-commerce industry can help reducing or keeping the payment frauds at bay. The first method is to ensure regular automatic update of your anti-virus, anti-malware, and firewall. These software programs play the role of shield against hackers and blocks their attempts to gain access to a secure network. Hence, their continuous update is necessary. Talking about few other ways to safeguard your online presence and shopping experience are mentioned below:

1. Stay update with the latest fraud trends. You can subscribe to a newsletter of reputed organization delivering such service
2. Always pay online via the authorized and well-known payment gateway
3. Change your login credentials and tokens on regular basis
4. For each transaction, customer should log in to complete the payment.
5. Keep checking your system with the anti-virus and anti-malware software
6. Try using an encryption program for emails and / or transactions where important information sharing is needed

Types of Payment Frauds

Phishing Scams: These are the most common forms of payment frauds. These frauds are prevalent in those emails or URLs wherein it is required to enter private / personal data. Some examples are bank account and credit card login credentials. You can stay away from the phishing swindles by trusting only the known and original websites of the merchants. In case you receive an e-mail from unknown account or person, then just mark it as spam.

Page jacking: Here, the hackers take control on some part of an e-commerce website through which they reroute the website traffic to a different website that may have malicious codes that can be used to access a network security system. It is the responsibility of e-commerce business owners to be aware of such activities.

Identity theft: This type of fraud is not limited to Internet; it is possible offline as well. Once the user’s personal information is stolen by a fraudster, it is used under false pretense – this is identity theft. One way of avoiding it is NOT to log into public Wi-Fi.

Authors of this post are Bill Trueman and Kevin Smith who are leading payment, risk & fraud expert who provide their payment fraud prevention consultancy services to card issuers and banks worldwide. For more information one can visit their website at http://riskskill.com/

 

Will The PSR(Payment Services Regulator) Changes Work?

Fraud Prevention Specialist, Risk Review Specialist

The Payment Services Regulator may make major UK infrastructural changes and legal changes to ‘open up’ the payments industry and access to it in the UK in order to encourage innovation. They have the powers to do many things, but care is certain needed. Caution is most certainly needed.

a) Only yesterday, I received an email telling me that they are not well staffed and resourced; and from my discussion and the stakeholder meetings so far, it appears that they have very little payments industry experience in the team. The objectives of the PSR need to be clear and not driven by a few disgruntled small banks wanting free access to many established infrastructures that are maintained and paid for by all of us.

b) There seems to be a format for these types of regulators who adopt an ‘economic’ regulator agenda. This format of addressing these things has opened up the telecoms networks to new operators, and the water pipe infrastructure in the water business (and Gas and electricity), and the PSR CEO comes straight from one of these. But payments are not the same, and without payment industry knowledge there is a danger that the PRS will regulate in the same way. Some creativity is required by the PSR – to ensure it does not simply act in ‘the same way’.

c) The biggest danger is that because payment systems are global and becoming more global, and as the UK is a leading global payments hub, that action by the PSR will make the UK market something different – uncompetitive, and isolated – so care must be taken NOT to do this.

d) The main restrictions on the payments ‘gateways’ are not competitive or restrictive as they were with water, electricity, gas and telecoms. The payments infrastructure is open to anyone who wants to ‘play’. The bigger restrictions are quite rightly about the governance and controls over money laundering – which requires very tough controls and restrictions to be imposed, managed, and governed. Again, The PSR needs to step carefully.

By Bill Trueman, Managing Director, UK Fraud(http://www.ukfraud.co.uk/) and Riskskill(http://www.riskskill.com/)

Originally Published at http://www.prlog.org/12411859-will-the-psrpayment-services-regulator-changes-work.html

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Top Technology Trends in Payments, Risk and Fraud in 2014

fraud prevention expert, risk review expert

1. Big-Data – Big-data has become a buzz-word to capture many things, but in finding risks and fraud, the more data that we look at, the better chance we have of finding unusual features and problems that should not be there. The manipulation of data and looking for such anomalies and patterns is getting ever faster and better – and there are generally lots of clues on ways to make better decisions – e.g. merchants looking at their own trading / selling for unusual sales.

2. Sharing Data within the confines of Data Protection laws (In Uk DPA s29) – This might sound complex, but it is not. Data Protection laws vary slightly market to market across Europe, but the principles are the same as they are governed by EU Data Protection law. Organisations cannot share much data between them because of Data Protection laws that protect us as consumers – and quite rightly so. But they can and do share details of fraudsters and confirmed fraud, and without the same constraints, but there are VERY strict rules on how this can be done and what can be shared in order to protect you and me from abuse of this. There are increasingly more people understanding what the rules are and what can be done, which will help stop more cheats. But equally there are many projects that have been going on for a long time that will never work because of the understanding of the restrictions on what can, and what cannot be done.

3. Making greater use of public data / bureau data. More and more, the value and usage of data bureaux data is being expanded, by the development of new products in the market and the need for organisations to use publically available data to better effect. With much better and stronger payments data, voters’’ role and default data (like County Court Judgments etc.), but also more shared databases available and more people using and sharing such information there are many more things that then can be done with the data. Remember, that every time that we get an insurance quote, ask for a loan, request a credit card or a new phone or gas contract, we are leaving ‘footprints’

at the Data Bureaux, that is all making our habits much more accessible.4.Greater use of Identity and Authentication Data – almost an extension of the data from the Data Bureaux, but with many more people doing things in the market to ‘know the customer’ better electronically and using data. We have almost gone full circle on this – as we evolved from a) Knowing who we were dealing with, b) Letters of introduction and c) “My word is my bond”. uberrimae fidei through to formal identification through d) the submission of passports and utility bills etc., and now to more and more e) electronic pattern analysis identification and crypto-based authentication services. The Electronic identification methods are becoming more refined and using more sources and more data to check that we are kind-of who we say we are, which in a way is a more complex way of knowing the person that we are dealing with (a) and letters of introduction (b). With government initiatives on identity management setting the ‘gold-standard’ of people identifying themselves through approved data identity bureaux, this can only change things for the better in the next 2-3 years.

5. Device identification / fingerprinting. Whenever we are ‘connected’ to the internet, the connectee can see how we are connected – and knows, with some degree of accuracy, what type of device it is that we are connected to and where it is. They have to know to deliver content to us. There are also companies evolving services that are going to become a lot more important who look at the devices that we are using in much more depth to make sure that when we connect to them, they recognise us. This is why, recently, when I tried to pay quite a large bill with my new iPhone, I was asked by the merchant to wait until I was using my normal computer. It realised that I might not be me, because they did not recognise my device. This technology area has a long way to go.

6. Movement away from ‘profiling types of people’ towards ‘knowing individuals’ – this is again a step towards a time in history when one knew exactly who one was dealing with. Insurance companies and loan providers historically have looked at the ‘groups that we fall into’ to predict the type of repayments or claims history that we might exhibit from the post-code / area that we live in, our age, the type of car/house that we have, how long we have been doing something etc.  This of course assumes that we all act the same as our neighbours, people who drive the same type of car/live in the same type house, or geography, or have the same job or family size.; which of course is not usually the case in today’s faster-moving world.  Whether for targeted marketing purposes or more targeted risk assessment and understanding, technology is helping us to be assessed as individuals and increasingly our behaviours are being used to determine what we can purchase and price what we pay for. For instance, insurance companies can price using telematics – devices attached to our car to assess our driving ‘style’ and thereby determine the potential risks involved to the insurance company.

7. Better use of the technology that we already have. The typical example of this today for me is the way that Apple has seen a commercial opportunity to enter the payments sector with ApplePay in the USA. The USA has not yet adopted EMV (CHIPs on payment cards) like the entire rest of the globe, and is losing more fraud than everywhere else, and has an outdated infrastructure that is causing problems for the financial services industry worldwide. The EMV backbone in the UK and across Europe is 15 years old, but the USA infrastructure dates back nearly 50 years. In one announcement, Apple did nothing new, but pulled together EMV, tokenisation (linking payment details at the point of purchase to the real payment credentials stored securely elsewhere and using a standard that exists today, but not widely used), NFC (again a common ‘tap & go’ technology used by millions on the London underground and more increasingly across the UK, but mandated by MasterCard for all payment terminals by 2020 across Europe; fingerprint identification/authorisation on the phone, and less talked about; geolocation technology to determine that the phone is physically where it is supposed to be when making a transaction.  They packaged this with some clever commercial arrangements to get issuer, acquirer, card scheme and merchant buy-in.

By Bill Trueman, Managing Director, UK Fraud(http://www.ukfraud.co.uk/) and Riskskill(http://www.riskskill.com/)

To read full report visit http://riskandfraudsolution.wordpress.com/2015/01/06/top-…

ApplePay in Europe – Will it work?

There is a big issue that Apple have probably faced in their negotiations with the card schemes. They probably had one of those days where they met with MC/Visa and and Apple executive said: “And this will of course apply globally?” – with an answer that introduced to Apple – Interchange rate differentials, Visa International vs Visa Europe, EMV 100% in EU and 0% in US, NFC issues on Mag-stripe vs CHIP, NFC implementation in EU, multi-currency issues with exchange rate setting issues etc.

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