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A Collective Approach to International Fraud Prevention

Guest blogger: Jim Oakes, managing director at Financial Crime Risk Limited So, the World Cup is over for another four years and sports fans will be turning their thoughts to the next big event on the sporting calendar. While I enjoy these types of events from a personal point of view, professionally, it’s disappointing to see a lack of pro-active discussion about how the UK banking industry should collectively handle payments fraud during large sporting events. While banks do take individual measures to protect their customers, there is little or no public discussion or consumer education as to the potential and unique risks associated with host countries.

Why is this important, you might ask? Well, the simple fact is that just by travelling abroad, consumers are more at risk from payment fraud by highly skilled and well-practiced fraudsters, adept at avoiding detection. As a result, banks need to ensure that they work more closely with customers to understand their spending patterns and adapt their behavioural profiling accordingly. For example, if a bank had known that a customer was going to the World Cup, it could have updated its behavioural profiling rules to accept transactions in South Africa and blocked other foreign countries. Then, fraud teams would have also looked out for transactions in high risk areas relevant to the venue such as Ghana and West Africa in the case of the recent World Cup, or for expensive purchases that don’t fit with someone travelling such as white goods, furniture, and transactions that occur a long way away from the games which would not ordinarily fit the customers behaviour. From a transaction monitoring perspective it is also important to make sure that transactions which occur during the night over weekends and in particular during public, seasonal and religious holidays are monitored closely, ideally in real time as these are often key high risk periods of attack.

Improving the communication and knowledge sharing within the different parts of the industry is a key step in the fight against card fraud. Fraudsters tend to take the path of least resistance, so if a decent amount of information sharing is in place the rest of the industry can take steps to prevent fraud before it occurs. This can dramatically reduce losses across the board, right down to blocking individual offenders’ IP addresses. Many banks are already taking steps to put their own minds and those of their customers at rest. A combination of customer education, communication and comprehensive real-time analysis techniques will help banks to prevent spikes in fraud around major sporting events. However, only when they begin to take a more collective approach to payment fraud and consumer education can banks ensure that they are doing their utmost to protect their customers. Jim Oakes Managing Director at Financial Crime Risk Ltd Certified Fraud Examiner Vice President of the Association of Certified Fraud Examiners UK Chapter (ACFE) Certified Financial Crimes Investigator International Association of Financial Crimes Investigators (IAFCI)

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