Faster and larger transaction flows have transformed the financial space into a lucrative superhighway, where bad actors can sweep in undetected and make off with substantial and ill-gotten gains.

Among the most exploited gateways for fraudsters are account-to-account (A2A) and peer-to-peer (P2P) payment systems. The increasing popularity of these methods for repaying friends, making purchases, or splitting bills has created an opportune environment for malicious activities. As more consumers opt for the convenience of these payment channels over traditional methods like credit cards or cash, bad actors are ready to seize the moment and strike.

The tolls of these attacks are not just financial; the damage extends to the trust and security of consumers. Recent data from the Federal Trade Commission revealed that consumers lost nearly $8.8 billion to scams in 2022, an increase of 30% from the previous year.

Kerry Thomas, Senior Vice President of Fraud and Decisioning Products at Mastercard, and Kevin Libby, Analyst of Fraud & Security at Javelin Strategy & Research, explored this topic during a recent PaymentsJournal podcast. They discussed the contributing factors that have fueled an increase in fraud attacks, why A2A and P2P fraud is rising, and what consumers and FIs can do to protect themselves.

PaymentsJournalCollaborative Efforts Are Needed to Combat FraudPaymentsJournal Collaborative Efforts Are Needed to Combat FraudPaymentsJournaljQuery(document).ready(function ($){var settings_ap56855085 = { design_skin: "skin-wave" ,autoplay: "off",disable_volume:"default" ,loop:"off" ,cue: "on" ,embedded: "off" ,preload_method:"metadata" ,design_animateplaypause:"off" ,skinwave_dynamicwaves:"off" ,skinwave_enableSpectrum:"off" ,skinwave_enableReflect:"on",settings_backup_type:"full",playfrom:"default",soundcloud_apikey:"" ,skinwave_comments_enable:"off",settings_php_handler:window.ajaxurl,skinwave_wave_mode:"canvas",pcm_data_try_to_generate: "on","pcm_notice": "off","notice_no_media": "on",design_color_bg: "111111",design_color_highlight: "ef6b13",skinwave_wave_mode_canvas_waves_number: "3",skinwave_wave_mode_canvas_waves_padding: "1",skinwave_wave_mode_canvas_reflection_size: "0.25",skinwave_comments_playerid:"56855085",php_retriever:"https://www.paymentsjournal.com/wp-content/plugins/dzs-zoomsounds/soundcloudretriever.php" }; try{ dzsap_init(".ap_idx_438608_29",settings_ap56855085); }catch(err){ console.warn("cannot init player", err); } });

What’s Contributing to the Rise in Fraud Attacks

Fraudsters are implementing manipulative tactics that aim to attack consumers at their most vulnerable points, particularly around peak shopping days like the holidays. Fraudsters are leveraging various channels, including email, and pretending to be a family member or friend in need of financial help.

Some are even fabricating fake charities, aiming to attract consumers and solicit donations for organizations that don’t exist.

“With the heightened transaction flows of the holiday season, it becomes this breeding ground for fraudsters to really start to take advantage. And what they’re really playing on is the emotion of the consumers,” Thomas said.

“We’ve also moved from a different form of victim fraud, where it used to be, I steal information via online channels or dark web to, ‘No, I’m going to get you to give me the information and I’m going to do that through manipulation,