Fighting digital fraud with advanced technology

PYMNTS and Darren BayerChief Product and Strategy Officer Cool musicon the most pressing fraud threats of 2022 and the right tools to fight them.

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Fraudsters target companies of all sizes and industries, taking every opportunity to steal money or data.

There are countless techniques at work, from technologically advanced tactics such as botnets to old-fashioned methods that exploit the unknowing of users, including trust schemes and phishing. One of the most dangerous methods, account takeovers, is currently declining in favor of alternative methods, Beyer noted.

“Account acquisition is a bit [rarer] It’s more than people think because it takes a lot of time to get in there,” he said. “Right now [the most common] The scenario is phishing: impersonating an official and demanding payment from the victim.The problem now is that victims use faster payments or [automated clearing house (ACH) services], it doesn’t have the same level of control or consumer protection as using your card, such as chargeback rights. “

Bad actors have different goals when it comes to fraudulent techniques, but ultimately it comes down to stealing money.

Some bad actors try to gain direct access to bank accounts, while others try to steal personal data such as passwords, usernames, and social security numbers with the intent to sell this data to other bad actors who will then monetize the data .

“At the end of the day, fraudsters always want to get their hands on the underlying funds; otherwise, what value is the data to them?” he said. “You can sell an identity and get paid for it, but ultimately, someone on the other end of the identity will monetize it. We’ve seen that happen quite often during a pandemic.”

Technology deployed in layers is the best way to prevent digital fraud.

One of the most important steps is to verify that customers are who they say they are, through know-your-customer (KYC) protocols and biometric or behavioral verification. However, this must be reinforced with behind-the-scenes analysis to catch bad actors passing through the first tier of security.

“Once you’ve identified a clear fraudulent account, you can look at all the data elements — addresses, phone numbers, emails and names — and you can look at not only the program that was attacked, but the entire system,” he said. “Once you find another account with the same phone number, or another account with the same email address, you can use artificial intelligence and machine learning to determine if those accounts are fraudulent.”