Should U.S. banks do more to reduce APP fraud?

Ken Palla discusses new guidelines from the Consumer Financial Protection Bureau

Suparna Goswami (gsuparna) •
August 1, 2022

Ken Palla, Former Director, MUGF Union Bank

The US Consumer Financial Protection Bureau plans to issue new guidelines requiring banks to compensate consumers for certain scams related to money transfer services. Ken Palla, former director of MUFG Union Bank, shares his view. MUFG Union Bank has nearly 300 retail branches in California, Washington and Oregon.

See also: On demand | Zero tolerance: control the landscape where you will meet your opponents

Palla says banks could look to the UK for examples of how banks deal with authorized push payment fraud, in which fraudsters trick victims into authorizing a money transfer. Major UK Financial Institutions in 2019 agreed to reimburse the victims. Banks have a number of fraud detection measures in place, including confirming the real identity of new payees, anomaly detection and payment processing delay.

“You also have behavioral biometrics. What you can see is that when these people are directed over the phone to transact online, their behavior is slower than normal” as they wait for the fraudster to give instructions,” says Palla.

In a video interview with Information Security Media Group, Palla explains:

  • Authorized push payment fraud and how to detect it;
  • The various measures that banks can take to mitigate the risk of fraud;
  • What the CFPB can do to thwart authorized payment fraud.

Palla is the former director of MUFG Union Bank. He helped shape initial responses to the 2005 and 2011 US regulatory guidelines from the FFIEC to improve online security for US banks and served as an advisor to the RSA Conference Global eFraud Forum. He is currently a member of the program committee for the annual RSA conference in San Francisco.

Comments are closed.