Should US banks do more to reduce APP fraud?
Ken Palla discusses Consumer Financial Protection Bureau’s new guidance Suparna Goswami () • August 1, 2022 Ken Palla, Former Director, MUGF Union Bank
The US Consumer Financial Protection Bureau reportedly plans to issue new guidance requiring banks to compensate consumers for certain money-transfer service scams. Ken Palla, Former Director, MUFG Union Bank shared his views. MUFG Union Bank has approximately 300 retail branches in California, Washington and Oregon.
See all: On Demand | Zero tolerance: controlling the scenario where you will meet your opponents Palla says banks could look to the United Kingdom as an example to see how banks handle authorized push payment fraud, in which fraudsters trick victims into authorizing money transfers. In 2019 large British financial institutions agreed to reimburse the victims. Banks implemented a number of fraud detection measures, including verifying the true identities of new payers, anomaly detection, and payment processing delays. “You also have behavioral biometrics,” Palla says. What you can see is that when these people are being directed over the phone to do online transactions, their behavior is slower than usual” because they are fraudsters. We are waiting to issue directions, Palla says. In a video interview with Information Security Media Group, Palla discussed:
- Authorized push payment fraud and how to detect it;
- Banks can take various measures to reduce the risks of scams;
- What can the CFPB do to prevent authorized payment fraud?
Palla is a former Director of MUFG Union Bank. He helped shape initial responses to US 2005 and 2011 FFIEC regulatory guidance to improve online security for US banks and was an advisor to the eFraud Global Forum, an RSA conference. He is currently a member of the Program Committee for the annual RSA Conference in San Francisco.
