Lloyds says crypto scams are spiking, CBA using AI to fight abuse

November 15, 2023 10:28 AM

A Lloyds Bank study finds that the number of crytpo scams rose by 23% year-over-year in October, with two thirds of those scams originating on social networks. Separately, the Commonwealth Bank of Australia is using artificial intelligence to detect abusive language in transaction messaging, and is offering this tech to other banks.

Simon Dawson/Bloomberg

Lloyds sounds a crypto scam alarm

The average loss for a cryptocurrency investment scam is about $13,000, the largest of any consumer fraud category, according to Lloyds, which reports the number of crypto scams are up 23% in 2023 as of the end of October, compared to the same time in 2022. Social media plays a large role in the problem, with 66% of scams originating on social networks, particularly Instagram and Facebook. The lures are fake advertisements, false celebrity endorsements and instant messages to unwitting consumers. "Investing can be a great way to make money, but you need to make sure your money is going to a trusted, genuine company," said Liz Ziegler, fraud prevention director at Lloyds Bank, in a release. "Crypto is a highly risky asset class and remains largely unregulated. Which makes it an attractive area for fraudsters to exploit." U.K. regulators recently began a crackdown on crypto marketing, sending out more than 140 warnings in less than 24 hours. —John Adams

Brendon Thorne/Bloomberg

CBA offers free 'abusive language' fighting tech

Commonwealth Bank of Australia has opened the artificial intelligence it uses to battle abusive transaction messaging to other institutions for no fee. The AI model identifies language consistent with harassment, threats and other offensive material. CBA says it built the technology after finding people were using the description of transactions to make personal threats, noting its technology spots about 1,500 cases of high-risk messaging that involves potential violence. Westpac has developed similar technology, enabling users to click a report button to report abusive language in payment messaging. CBA recently began experiments that use AI to mimic human testing for new bank products. —John Adams

Visa expands 'ID for life' service

Visa has added markets in Asia Pacific to its real-time account updating service, providing cardholders with a single identifier that they never have to change. Called VAU, the service enables businesses to automatically update consumers' credentials for stored cards that have expired. VAU checks the payments that merchants submit for expired credentials, and automatically processes payments with updated credentials. This is designed to lower authorization declines, particularly for recurring payments such as subscriptions. VAU launched in North America in 2017 and Europe in 2022. In Asia Pacific, partners at launch include Adyen, Checkout.com, Stripe and Worldpay. The expanded VAU service also includes access to Visa's Cybersource, which produces fraud risk scores for payments. —John Adams

Monzo adds cash back incentive

U.K. challenger bank Monzo has launched a cash back incentive, with the perk linked to purchases at merchants in Monzo's network. Monzo is attributing the marketing program to the U.K.'s cost of living crisis, which has been marked by inflation, high housing costs and an increase in returned items for retailers. Merchants at launch include ASDA, Boots, H&M, Deliveroo and Disney+. Consumers can earn between 2% and 10% depending on the retailer, and will receive alerts on offers from relevant merchants based on spending habits. The product will initially launch in the U.K. "We know that in the current climate, more and more people are looking to money-saving solutions such as cashback, as a way to make their hard-earned cash go further," said Kunal Malani, general manager at Monzo, in a release. Monzo is also in the midst of an international expansion. —John Adams

Mastercard signs cyber partner in Saudi Arabia

Saudi Awwal Bank will collaborate with Mastercard to deploy the card network's transaction risk management technology, which uses artificial intelligence and emerging data management techniques to spot potential payment fraud early in processing. The bank attributed the addition to its ongoing digital transformation in line with a government goal of creating a 70% cashless economy by 2030. Mastercard's long-term strategy is to build sources of revenue that aren't reliant on card payment fees, as regulations and competition squeeze interchange. The card network has invested heavily in payment technology, security and other risk management tools as it attempts to act as a consultant and technology providers to banks and merchants. —John Adams

Klarna expands access to advertising tools

Swedish fintech and payment company Klarna has updated its marketing services in an effort to gain more of its merchants' relationships. The company has expanded its Ads Manager from the U.S. to the U.K. and Sweden. Ads Manager connects consumers to retailers when those shoppers are actively seeking items. These merchants can then engage with consumers with targeted advertising and other Klarna products, such as buy now/pay later lending. Klarna has also upgraded its Creator Platform, which enables content producers to recommend products from a network of thousands of retailers, share videos and other content. Like many fintechs, Klarna is attempting to recover after a slump that followed a dramatic expansion during the pandemic. The company recently reported its first quarterly profit since 2019. —John Adams

Worldline debuts Tap to Pay for French businesses

Payment technology company Worldline is offering Apple's Tap to Pay for large merchants in France. Tap to Pay enables iPhones to accept contactless payments without additional hardware. The technology has been expanding over the past few years, and is considered an interim technology as checkout-free retail improves enough to be usable in large store footprints. Last year, Worldline acquired a 55% stake in SoftPos.eu, which enables Android devices to support Google's version of Tap to Pay. Android and Apple cover most of the Tap to Pay market. Worldline recently reported earnings growth, but suffered a selloff due to the impacts of inflation. —John Adams