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U.S. and Canadian banks report tenfold increase in digital presence Scam Criminals have adopted techniques this year to trick customers into sending money, according to cybersecurity firms Biocapture.
Tom Peacock, director of global fraud intelligence at BioCatch, said there has been a sharp increase in reported fraud since the first three quarters of 2023 as banks put in place more controls to prevent account takeovers and other forms of fraud.
“Fraudsters have realized that humans are the weakest link,” Peacock said. “It’s easier to convince humans to do something through manipulation than to try to circumvent technological controls.”
BioCatch, a Tel Aviv-based company, uses Behavioral Data from mobile apps and websites helps banks differentiate between real users and criminals, the company provided findings to CNBC ahead of a report that gathered information from 170 U.S. and Canadian institutions. the company stated American Express, Barclays Bank and HSBC is one of its customers.
The bank is pressure As regulators and lawmakers focus on the harm caused by digital scams, push criminals off platforms and compensate more victims. JPMorgan Chase, Bank of America and Wells Fargo said the Consumer Financial Protection Bureau may penalize it for its role in the giant Zelle payment network. Customers of the three banks reported fraud totaling $166 million in Zelle transactions in 2023.
Peacock said “social engineering scams,” in which criminals use persuasion tactics to convince victims to send them money, began about five years ago but have “really taken off” in the past 18 months or so.
Peacock said Zelle is the preferred way for criminals to withdraw funds because it is faster than other money transfer methods.
“When Social Engineering Scams Really Start to Come Out take off “In the U.S., it’s similar to Zelle in that the two come together. A platform like Zelle allows fraudsters to be faster and more successful,” he said.
Zelle Owner Early Warning Service Says Scams and Fraud Reports Decline While Transaction Volume Increased in 2023 almost 50%, and only a small proportion of payment volume is disputed as fraudulent.
Peacock added that the growth cited by BioCatch is also due to greater identification of activity that banks had previously not flagged as fraud due to increasing regulatory pressure. BioCatch declined to provide the specific numbers of the reported scams, citing customer confidentiality.
BioCatch customers reported a 59% reduction in the number of fraudulent accounts opened, another sign of the cat-and-mouse dynamic of cybercrime. Instead, criminals focused on taking over existing bank accounts, leading to a threefold increase in fraud through this channel, the company said.
