To effectively combat payment fraud, we need to skate to where the puck is going
Reflections from The SUMMIT Series.
AUTHOR
Darrell Jantzi
Director of Fraud
In this role, Darrell leads a team of fraud experts in developing an enterprise fraud strategy with a particular focus on centralized fraud services that mitigate risk for real-time payments and the forthcoming Real-Time Rail (RTR) payment system.
On March 26, I had the opportunity to participate in The SUMMIT Series, a forum hosted in the lead-up to The Payments Canada SUMMIT, designed to engage the payment ecosystem in conversations on today’s most relevant payment topics.
Hosted by Paul Andrusyshyn, Partner, IBM Payments Centre, I joined panellists Kate Frankish, Payments Expert (formerly Pay.UK), Ryan Powell, Senior Director, Fraud Strategy at CIBC and Phillip Straley, President at FNA to discuss effective fraud management strategies in the era of real-time payments.
As we all know, fraud is a significant and growing issue globally, and the Canadian market is no exception. We’ve observed in other jurisdictions that as money moves faster, fraud increases. A recurring theme throughout the discussion was the need to continuously evolve our strategies and tools to stay ahead of — and anticipate — fraudsters. As my fellow panellist, Phillip aptly put it, 'We need to skate towards where the puck is going to be.”
The conversation began with what Payments Canada is proactively doing to mitigate fraud on the Real-Time Rail (RTR). A key priority as we work with the industry to modernize Canada’s payment infrastructure is to not only make payments faster, but safer. Canada aims to be among the first to launch a real-time payment system with centralized fraud services in operation.
These services include a number of key capabilities, which will augment existing controls that financial institutions already have in place today, including confirmation of payee. All of these are designed to leverage centralized information to allow banks and their customers to make more informed decisions about fraud risk before initiating RTR transactions.
Panellists noted the success of capabilities like confirmation of payee in the UK and emphasized the importance of implementing solutions that look at the payment pre-settlement and post-settlement. This ensures the legitimacy of a payment before and after it’s made. It’s important that as these capabilities are implemented we think of them holistically and validate the transaction at both ends.
The discussion shifted toward some of the most prevalent types of payment fraud, including — and perhaps most notably — authorized push payment (APP) fraud. This type of fraud occurs when individuals are tricked into authorizing payments to fraudsters, along with other deceptive schemes that target unsuspecting consumers and businesses. Common APP fraud scams include impersonation scams, romance scams and CEO scams, to name only a few.
Another theme that emerged is the importance of working together to deliver effective fraud mitigation services that protect Canadians. As Kate put it, “Fraud shouldn’t be a competitive game.” To make a significant impact, we need cooperation from all levels — industry, financial institutions, government and telecommunications service providers.
In fact, we all have a role to play in protecting ourselves and others from fraud. In recognition of Fraud Prevention Month, the discussion concluded with panellists sharing practical tips on what we can all do to stay safe from fraudsters, including:
- Screen your calls: Don't answer the phone if you don’t know who’s calling.
- Take a moment: If you get an urgent call, take a step back and think about it before acting.
- Have a plan to get off the phone and verify: If you feel uncomfortable, hang up. Then, check with a trusted person to verify the information.
- Be cautious online: Only accept friend requests from people you know and trust on social media.
- Check your credit score: Use your banking app to check your credit score regularly for unauthorized activity or inaccuracies.
- Talk about fraud: Discuss fraud prevention with your family, friends and neighbours. These things are real, and awareness is key. Education is our best defence.
Fraud mitigation is a journey. It’s not just about reacting to what’s happening now, but anticipating where the next threat will be. I have no doubt that by working together, we can stay ahead. Just like a hockey player skates to where the puck is going, we are developing strategies and tools that will help us stay on top of evolving fraud risks.
To hear the full discussion, please watch the recording. If you'd like to join the conversation, I invite you to register for The SUMMIT, taking place from May 6 to 8 in Toronto, using my promo code, SUMM25PCVIP, to save $100 on your ticket.
See you there!
