Impersonation scams have become a pervasive issue, particularly since it’s much harder for many to distinguish if the person reaching out to them is in fact someone they know or if it’s a fake profile. As result, many having fallen victim to these scams, sending money to people impersonating their loved ones or someone in an authoritative position—leaving them feeling disheartened and distrustful.
To combat this, Mastercard has introduced its AI-based Consumer Fraud Risk solution in the UK, which aims to predict and prevent real-time payment scams before any funds are lost.
Because organized criminals often move through a series of mule accounts, Mastercard has spent the past five years working closely with UK banks, tracing the flow of funds and promptly shutting down the accounts. By analyzing specific factors such as account names, payment values, payer and payee history, and connections to scam-associated accounts, Mastercard’s AI solution is allowing banks to intervene in real time, preventing the loss of funds.
“Banks have found these scams incredibly challenging to detect,” said Ajay Bhalla, President of Cyber and Intelligence at Mastercard in a prepared statement. “Their customers pass all the required checks and send the money themselves; criminals haven’t needed to break any security measures. As we all live more digital lives this type of fraud erodes victims’ confidence to interact online. Our goal is to build and maintain that trust. Using the latest AI technology, we are helping banks identify and predict which payments are being made to fraudsters and stop them in real-time.”
TSB, one of the first banks to adopt Mastercard’s Consumer Fraud Risk tool, has already seen success. Within four months, the bank experienced a significant increase in fraud detection, with potential scam payments prevented equating to approximately £100 million per year across the UK. As more banks adopt this innovative technology, the impact on fraud prevention could be substantial. Mastercard is also exploring opportunities to scale the solution in international markets.
Scammers have been increasingly targeting individuals and businesses through impersonation tactics, particularly the pervasive authorized push payment fraud (APP fraud). APP fraud currently represents 40% of UK bank fraud losses and is projected to cost a $4.6 billion in the U.S. and UK by 2026, per ACI and Global Data.
By integrating customer behavior insights and real-time scam detection, banks can effectively combat a wide range of scams, such as purchase scams, impersonation scams, and romance scams. Given that purchase scams constitute 57% of scams in the UK, this solution addresses a significant challenge for both banks and consumers.