The June FraudTech Digest by Cybertonica

2 July 2021

Welcome to our June Cybertonica FraudTech Digest!

In this June FraudTech Digest edition, we’ve found the latest articles inside the fraud and payment space, providing you with simplified versions, outlining the key points discussed in each.

If you have missed our May FraudTech Digest – catch up here.

In our June FraudTech Digest, we’re discussing:

  • ✅SCA rollouts becoming compulsory for banks from September 2021
  • 💶The digital euro and consumer privacy 
  • ❗Issues with Bank Fraud Regulators
  • 📈Ransomware cyber-attacks on the rise
  • 💰Shopify’s new Shop Pay feature
June FraudTech Digest #1
  • Lenders and loan providers will start contacting customers more frequently to verify the legitimacy of card #payments online. The rules come into force in September 2021. Already, the FCA is pushing these changes by contacting lenders to check whether they have provisions in place.
  • Online payments under £25 will need to be verified if multiple #transactions in a row total to £85+. This verification will ensure it is you carrying out the transactions and not a foreign user accessing your account. Your usual online payments under £25 and recurring payments like phone bills will not require #security checks.
  • Security checks will take place in the form of texts containing a #verification code from your bank. Alternatively, some banks may ask you to log in to their online banking website to verify your online activities. Most importantly, It’s critical to be mindful in this process. Eg, a bank will never ask for your pin or account number in their verification process. You can read more here.
June FraudTech Digest #2
  • The Financial Times reports that the European Central Bank aims to digitalise the Euro. This is based on their interview with an executive board member of the bank, Fabio Panetta. This initiative combats the spread of digital coins created by other nations and companies. As the bank lacks commercial interest in managing and monetising users’ data, they can ensure better protection of individuals’ privacy . 
  • The central bank has tested ways to separate individual’s identities from their payment details to enhance consumer’s privacy.  
  • There are some concerns with the digitalisation of the euro. A survey conducted by Bundesbank indicates that over 50% of German households are sceptic about this concept. As a reason, they have highlighted the significant changes this would bring to the payments system in the society.
  • Panetta addresses these concerns, as the #DigitalEuro would not undermine the commercial banking system or replace cash. This would be achieved by capping the amount individuals can hold at €3,000 each.
  • Moreover, current digital currencies like bitcoin can be dangerous due to the decentralised nature. And, criminals are adopting digital currencies to fund their activities. However, once the euro is digitised, additional checks on most transactions will take effect, to avoid money laundering, terrorism and tax evasion.
June FraudTech Digest #3
  • Amidst the pandemic, fraudsters have found innovative ways to con millions of pounds out of unsuspicious consumers (The Financial Times). The adoption of phising scams regarding parcel deliveries, Covid-19 jabs and tax refunds have skyrocketed.
  • The majority of UK banks have adopted a voluntary code that refunds “no-fault” victims. Yet, these codes are applied inconsistently throughout the industry.
  • For instance, the number of victims who got their money back ranged from as few as 30% of cases at one UK bank to 75% at another. The volume of #fraud complaints is taking the FOS up to nine months to start investigating fraud cases.
  • 73% of bank fraud cases are favouring the customer, with the average complaints handled by the FOS at 32%. The consumer editor at the Financial Times Claer Barrett concludes that this statistic should shame the banking industry. 
  • Banks are on the hook for all the fraudulent losses. In comparison, social media sites, online platforms and telecom providers are not paying taxes on these losses. Barrett suggests that this is a part of the problem banks face and a combined approach is needed to combat fraud issues and find alternate solutions.
June FraudTech Digest #4
  • Ransomware strikes have surged over the past year (via The Guardian). This includes the rise of hard-to-trace cryptocurrencies and the work-from-home boom, resulting in new IT vulnerabilities. 
  • The recent attack on Colonial Pipeline, one of the largest operators of US fuel conduits, presented the issue of victims being forced to decide between paying criminals their ransom demands or being unable to operate their business.
  • Colonial Pipeline decided to pay a ransom of $4.4 million in cryptocurrency to DarkSide, the criminal organisation behind the attack.
  • #Ransomware attacks operate the same way as other #cybersecurity breaches. Businesses with internet-connected devices that are not up-to-date with the latest updates are at risk of these breaches. Regarding the links that come through via phising emails, user’s need to be vigilant as this enables malware to take root in a company’s network.
  • Educating employees on basic cyber education is the first line of defence in preventing #cyberattacks. Most importantly, installing the latest IT and software are critical for the prevention of cyber attacks.
June FraudTech Digest #5
  • As per this article by Retail Dive, Shopify offers Shop Pay to all Facebook, Google merchants. The #eCommerce platform hopes to expand its #checkout technology with sellers on Facebook and Instagram to use the Shop Pay feature this summer. 
  • Shopify enables online sellers outside of their platform to use their Shop Pay function. This is in progression for Shopify to become the preferred checkout method for all #merchants.
  • The Shop Pay integration into Facebook and Instagram will give it access to more independent brands. Shopify concludes multiple benefits from using this feature, including higher #conversion rates, order management and a carbon-neutral payment option for shoppers.

Please get in touch if you have any news to discuss or share for our FraudTech Digest. And, if you have any questions or would like to speak to one of Cybertonica experts, send us a message at hello@cybertonica.com.

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