Haiti online donations blocked by bank fraud systems

Banks are blocking some online donations made to charities helping victims of the Haiti earthquake because automated systems are flagging them as fraudulent, according to a BBC report.

Fraudsters often make online donations to check whether stolen card details work before buying goods illegally online. Some banks have moved to counter this problem by using automated systems which block unusual first time payments to charities.

With large numbers of Brits making donations over the last few days to groups working in Haiti, several have seen payments blocked by these systems at banks, including HSBC.

The BBC says the scale of the problem "is not clear" and customers can contact their banks to unblock payments.

Separately, the FBI has called on people to "apply a critical eye" to requests for donations in the wake of the earthquake as security firms warn of attempted scams designed to take advantage of the event.

Haiti online donations blocked over fraud concerns - BBC

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Comments: (1)

A Finextra member 19 January, 2010, 16:40

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It is generally recognised that the vast majority of alerts to potentially fraudulent activity turn out to be false positives. Yet as central banks and regulatory agencies impose more oversight and large fines on financial organisations for failing to monitor, detect and manage certain types of risk behaviours, this has in turn led to more alerts being considered for investigation by the authorities.

The problem faced by banks and other financial institutions is that disjointed systems can't spot common links, as results generated from previous alerts and investigations are rarely shared across lines of business and different types of fraud, AML and sanctions investigations.

To overcome this, process-centric BPM systems automatically make intelligent links between people and assets, escalating only those transactions requiring fuller investigation and qualifying out a high proportion of false positives. And, as in the case of the current Haiti disaster, avoid unfortunate side effects by making sure that money, honestly donated, gets to the people who need it most, fast.