Authorized Payment Scams: Why Banks Are So Slow to Respond

Fraud Management & Cybercrime , Fraud Risk Management , Video

Banking Security Expert David Pollino on Why Zelle Scams Are So Hard to Solve Suparna Goswami (gsuparna) • November 22, 2022     David Pollino, former divisional CISO, PNC Bank

Banks are getting better at catching a wide range of scams targeted at customer accounts, but they are still struggling with stopping authorized payment fraud through peer-to-peer payment companies such as Zelle, where scams have increased 109% in the United States in the past year, says David Pollino, former divisional CISO with PNC Bank.

See Also: Live Webinar | How To Meet Your Zero Trust Goals Through Advanced Endpoint Strategies

Ironically, Pollino says, Congress is looking into Zelle fraud and possibly contemplating new regulations, and that may be slowing down Zelle’s plans to add detection capabilities and controls. Zelle, owned by a consortium of large banks, is probably trying to see what regulations emerge before changing “the rules of the system – that might be throwaway work.”

Authorized payment scams aim to trick customers into making authorized payments. Banks currently are not required to refund these types of transactions, but Pollino says he wouldn’t be surprised to see banks agree to a chargeback to protect customers hit with scams.

“I think the financial institutions will figure it out. They will manage it down in such a way that it’s a minimal inconvenience to them on their bottom line and customers will feel safe utilizing

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