Fraud is a problem. CIFAS, the
UK’s Fraud Prevention Service, noted a 9% increase in overall fraud from 2010 to 2011. Startlingly, there was an 18% rise in facility takeover fraud –when a criminal obtains your credit card details, bank details or mobile phone to use your money without
permission. CIFAS cited tough economic times as the reason for this boom. Whatever the driver, this tells me that fraudsters are ever more determined and becoming more innovative.
These findings coincided with the
BBC reporting from Davos at the end of last week that the web economy is expected to double by 2016, from £1.5 trillion to £2.7 trillion. Mobile phones are, unsurprisingly, the reason for the web economy’s expansion, as cheaper handsets mean more people
can afford them and reap the benefits of advancing technology.
Taken together, these two statistics show that not only has fraud grown, but that trend is likely to continue as we move towards a more web-based and mobile world. Yet, Davos’ world economic leaders did not really address how to fight fraud in the expanding
The obvious solution would be for banks to strengthen their security to protect customers’ money. However, the way they do this is equally important. CIFAS recommends that banks increase their identification requirements or ensure that customers change their
passwords and PIN numbers on a regular basis. This can be laborious for the customer and, unfortunately, this may no longer be enough, as we have seen that fraudsters have found ways to intercept this information already.
Up to date information can also help. Recently,
DBS implemented a system to alert customers who have been the victims of skimming that money has been withdrawn from their account. While this is certainly well intentioned, wouldn’t it be better to prevent the fraudsters from withdrawing money in the first
Another, better solution would be to make whatever details the fraudsters obtain unusable, so they can’t intercept your online bank transfers, use your credit card, or hijack your mobile phone by call forwarding or SIM swapping. What’s more, the technology
already exists to alert you whenever a fraudster is trying use your money − in real-time.
This can be done by adopting and out-of-band (OOB) approach to the verification process by utilisingyour mobile phone and incorporating a multi-factor approach to security, all of which only takes a few seconds. And as I’ve mentioned before, the growth
of the mobile, web economy will mean a huge increase in the use of voice biometrics for authentication.
As Peter Hurst, Chief Executive of CIFAS, said, “Prevention . . . remains better than cure, and it is time for all organisations and consumers to start reviewing their approaches to preventing fraud rather than trying and failing to recover losses.”