Mastercard has updated its Consumer Fraud Risk (CFR) solution to improve protection against real-time payment scams. Mastercard has updated its Consumer Fraud Risk (CFR) solution to improve protection against real-time payment scams.

The new improvements aim to provide UK banks with better visibility into potentially fraudulent transactions, allowing them to prevent scams before they occur through the use of AI-driven insights. One of the most prevalent types of scams is Authorised Push Payment (APP) fraud, where victims are tricked into sending money via false websites, emails, text messages, or phone calls. According to Mastercard, in 2023, APP fraud led to UK consumers losing GBP 460 million.

Currently, banks in the UK may voluntarily reimburse fraud victims, but starting on 7 October, new rules introduced by the Payment Systems Regulator (PSR) will require banks to compensate all APP fraud victims, barring specific exceptions. AI improvements to fight payment scams Since early 2023, Mastercard’s CFR solution has been assisting 11 UK banks by identifying potentially fraudulent payments before the money leaves the victim's account. The system works by analysing multiple transaction data points and assigning a real-time risk score to alert the sender’s bank.

The PSR gathers payment data from 14 of the UK's largest banks. In 2023, this data revealed a 12% decrease in the total value of APP scams, dropping from GBP 389 million to GBP 341 million. Mastercard’s newly enhanced AI capabilities now provide the same fraud risk score to receiving banks within seconds, enabling them to detect if a payment is heading to a fraudulent account, often referred to as a ‘mule account.’ Regarding these new developments, officials from Mastercard noted that fraudsters have consistently tried to deceive consumers with fake websites and deals.

They added that Mastercard is enhancing its technology to provide banks with additional tools to identify and halt these scams more effectively. In preliminary tests, the new 'inbound risk' alerts have improved a bank’s ability to detect high-risk mule accounts by an average of 60%. Mastercard also plans to expand its Consumer Fraud Risk solution globally, aiming to bolster consumer protection and strengthen the digital ecosystem.

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