Financial institutions need to make life more difficult for scammers. Westpac explores options to block payments to suspected nefarious individuals. The effort primarily focuses on online transactions from overseas retailers.
A Smart Play By Westpac
Online fraud and scams will remain a pressing problem in 2022. Despite numerous initiatives to bring this illicit activity to an end, scammers continue to rake in millions of dollars per year. Moreover, there seems to be an increase in high-risk overseas retailers, resulting in customers losing money. Westpac acknowledges something needs to change, and soon.
Starting this week, the financial institution automatically blocks online transactions to retailers considered a potential scam. When a user pays online through their card, the transaction is halted, and the customer receives an SMS notification. It is better than letting transactions go through and filing for chargebacks, both costly and time-consuming processes.
Westpac’s Head of Fraud Ben Young explains:
“The technology adds another layer of security for our customers shopping online and intervenes when they are making a purchase with a suspect retailer. The new capability builds on our existing 24/7 fraud detection systems which focus on preventing transactions on stolen or copied cards.”
Westpac trialed this approach last year, preventing over 11,000 potential scams for 4,000 customers. A net saving of $1.2 million is the outcome, indicating consumers are still too eager to trust overseas retailers if the price is low enough. Common sense should always prevail in such a scenario, yet it rarely does. Following the successful trial, Wespact has extended the measure. Users can still call the bank’s scam assistance team to process the transaction if they consider the site to be legitimate.
Most blocked merchants sell diet pills, online dating subscriptions, business support systems, nutrient supplements, or music subscriptions. In over 99% of cases, a blocked transaction will not receive a customer request to be processed regardless.