From CNBC: 2024-11-13 09:01:54

U.S. and Canadian banks see a ten-fold increase in digital scams, with criminals targeting customers to send money. BioCatch data shows a rise in reported scams, as banks implement more fraud prevention measures. The rise in social engineering scams coincides with the popularity of Zelle for quick fund extraction.

BioCatch reports a surge in scams, with American Express, Barclays, and HSBC as clients. Banks like JPMorgan Chase, Bank of America, and Wells Fargo face pressure to remove criminals from their platforms and compensate more victims. Customers reported $166 million in fraudulent Zelle transactions in 2023.

Criminals exploit Zelle for faster fund extraction, leading to a rise in social engineering scams. Early Warning Services reports an increase in transaction volumes but a nearly 50% decrease in fraud reports. BioCatch notes an increase in identification of previously unflagged scams due to regulatory pressure.

BioCatch clients report 59% fewer fraudulent account openings but a three-fold increase in fraud through existing accounts. The rise in scams is driven by increased regulatory pressure and better identification of fraudulent activity, leading to a focus on taking over existing accounts rather than opening new ones.

Read more: Banks report ten-fold surge in digital scams, BioCatch says