Fraud Management & Cybercrime , Fraud Risk Management , Video
Tools to Reduce Authorized Payment Fraud and ScamsBanking Researcher Ken Palla Shares New Report on Controlling Zelle Scams
Since Zelle fraud has increased 109% in the United States, the banking industry is struggling to reduce authorized push payment scams. Ken Palla, former director at Union Bank, shares tips for combating fraudsters, including delays on large transactions, education and behavioral analytics.
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Palla notes that the vast majority of transactions are legal, but at least 5 million Americans fell victim to Zelle fraud and scams last year. In his report, created in collaboration with BioCatch, Palla says banks can reduce fraud by simply slowing down suspected APP fraud transactions.
"Everybody says they don't want friction, but the problem is, when you look at how transactions work, how the scams work, you really have to rework this," Palla says. "So if there is a high-dollar-value transaction, and it looks like high risk, a delay of a few hours will not really hurt customers. Banks can also have pop-up - where they nudge customers with messages - 'Is someone asking you to do a transaction? Do you really know them?'"
In this interview with Information Security Media Group, Palla discusses:
- Why additional controls are needed even though 99.9% of Zelle transactions are documented as legal money transfers;
- Strategies for flagging or slowing down certain transactions to mitigate fraud;
- How addition controls by banks and telecommunication companies can help reduce scams.
Palla helped shape the initial responses to the U.S. FFIEC Regulatory Guidance in 2005 and 2011 to improve online security for U.S. banks and served as an adviser to the RSA Conference eFraud Global Forum. He also serves on the program committee for the annual RSA Conference in San Francisco.