Cybercrime , Fraud Management & Cybercrime , ID Fraud

Using Behavior Metrics to Detect Authorized Payment Fraud

It is particularly challenging for financial institutions to catch authorized push payment fraud, as there is a genuine customer logging in and carrying out transactions, says Steve Ledford of The Clearing House, a payments platform that all federally insured U.S. depository institutions are eligible to use for payments.

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"There are signs to look out for. For instance, is there an unusual type of behavior for this particular sender? If you see a payment that is unusually large, not in accordance with prior habits around this, especially to a new payee, you have a red flag," says Ledford. Ledford, who is also part of the Payments 20 Group, suggests leveraging behavioral metrics to tackle this type of fraud.

In a video interview with Information Security Media Group, Ledford also discusses:

• How authorized payment fraud has evolved;
• The challenges of fighting against this type of fraud;
• Key technologies that can play a fraud-fighting role.

Ledford is senior vice president, products and strategy, at The Clearing House. He works with payments leaders on strategic issues. Earlier, he was a partner with Novantas, a financial services consulting firm. Before that, he was a leader in McKinsey’s global payments practice and was president of Global Concepts, a consulting and research firm specializing in payments and cash management.