How to combat authorized push payment scams

Even before COVID-19 turned our world into a largely digital one, authorized payment fraud – where the victim agrees to send money to someone who has misrepresented who they are or what they will do with the money – was on the rise.

Now fraudsters are exploiting people’s changed behaviors, anxieties and general uncertainty to devastating effect. Following the accelerated adoption of digital payments, many are plying their trade online, where it is easier to mask their identity and motives. The scams vary from fraudulent invoices, when the fraudster sends a fake invoice seemingly sent by a regular vendor to the victim; romance scams, where the victim is courted, often over the internet, and manipulated into sending money to the fraudster; purchase scams, where the fraudster convinces someone to pay for goods or services that will never be delivered; and more. They target consumers and businesses of all sizes — even government agencies and organizations — in equal measure.

The convenience and speed of digital real-time payments make it even harder to stop these scams because the payment is irrevocable and stolen funds can be moved on or laundered quickly. What’s more, because the payment is authorized by the victim, the victim is usually liable. That means it’s more important that ever to deploy fraud prevention before these payments gets made.

P20, a forum for global payments players to work together on issues of accessibility, security and inclusivity, has released a study with best practices for industry, regulators and government leaders to combat authorized payment scams. The working group included Mastercard's Liam Cooney, vice president for financial crime solutions. The goal is to work toward a comprehensive, industry-wide approach to enable rapid information sharing and collaboration to detect and prevent money from reaching these criminals.