Mastercard has significantly updated its Consumer Fraud Risk (CFR) solution, enhancing its capability to protect consumers from real-time payment scams. Announced on September 24, 2024, these AI-powered updates provide UK banks with increased visibility into potentially fraudulent transactions, enabling them to intercept scams before they occur. Known as Authorized Push Payment (APP) fraud, these scams cost UK consumers $607 million in 2023. With new regulations from the UK's Payment Systems Regulator (PSR) coming into effect on October 7, 2024, which will require banks to reimburse most APP fraud victims, Mastercard's solution is designed to help banks comply with the new requirements. Since early 2023, the CFR solution has assisted 11 UK banks in preventing scam payments before funds leave victims' accounts by using real-time risk scores based on multiple transaction data points.
The additional AI enhancements now also provide risk scores to receiving banks within seconds, allowing them to identify accounts potentially used by fraudsters, known as mule accounts. Initial offline tests showed a 60% improvement in banks' ability to detect high-risk accounts early. According to Johan Gerber, Executive Vice President of Security Solutions at Mastercard, this update represents a substantial technological advancement aimed at protecting consumers from increasingly sophisticated fraud schemes. Mastercard plans to expand CFR to global markets within the year, reinforcing its commitment to building a more secure digital ecosystem worldwide. Data from the PSR indicates a 12% reduction in APP scam values across 14 major UK banks in 2023, underscoring the effectiveness of advanced fraud prevention technologies.
