THE BANKING AND Payments Federation of Ireland (BPFI) has called for a “whole of system response” to tackle authorised push payment fraud in Ireland in an attempt to stop online banking scams.

The BPFI, which represents the banking sector in Ireland, told the Oireachtas Finance committee today that fraudsters have “found that it is easier to manipulate customers” into transferring money directly to them, rather than attempting to steal their victim’s identity.

Through authorised push payment (APP) scams, fraudsters can use hacked emails and log-in details to various accounts to impersonate accounts that a potential victim has already built a relationship with, like a bank or a direct debit.

Niamh Davenport, Head of Financial Crime in the BPFI said: “In most cases the customer fully believes they are making a legitimate payment, even at times when it has been flagged to them by their banking provider that it is high risk.”

Last year, almost €2 million was stolen from people in Ireland through “romance fraud”, according to gardaí. These scams attempt to lure money, through cryptocurrency transfers, from people who believe they’ve met a potential partner online.

The BPFI say that romance fraud is just one among the many scams in practice in Ireland and that roughly 80% of all scams in the United Kingdom are known to originate through online advertising.

Setting up a national database

Davenport said that a shared fraud database scheme, similar to schemes across Europe and the UK, would support both the Irish financial sector and gardaí and added that the BPFI have worked to develop one.

BPFI has worked with members to develop an industry shared fraud database which is ready to stand up once legislative amendments currently with the Department of Justice are approved.”

Davenport added that the “key difference” the BPFI note between Ireland and other jurisdictions is the lack of such a scheme, adding that by working together “it becomes possible to gather and share intelligence, identify patterns, and proactively address emerging fraud trends”.

“Cross-sectorial collaboration”

Davenport said that an all-industry approach, with the help of the State, An Garda Síochána, as well as telecoms, financial and media companies, is needed to stop these scams from taking place by creating “cross-sectorial collaboration on intelligence sharing”.

Davenport added that this would be a “significant game changer in fraud prevention” in the country.

The BPFI said that it currently holds a bi-monthly meeting with a joint intelligence group where it trains banks and branch staff to correctly handle and identify customers who are being defrauded.

The group said further collaborative work is needed with internet providers and social media companies as they have a “significant role to place in blocking fraudulent websites, monitoring network traffic and taking down fake advertisements”.

Davenport said: “Collaboration creates a united front against fraud and by leveraging the expertise and resources from across all stakeholders it becomes possible to disrupt the fraud ecosystem and protect consumers from falling victim to scams.”

Making customers aware

The BPFI told the committee that their FraudSMART programme has attempted to raise awareness of potential scams to customer and business since 2017.

Davenport said that the programme “regularly raises awareness about the authorised push payment fraud scams”, among other scams, through a variety of channels and wishes to continue it’s work further.

Davenport added: “Ultimately, empowering consumers and businesses through education helps to close the gap that fraudsters exploit when manipulating customers and this is what our FraudSMART programme sets out to achieve.”

This year, the programme highlighted that “highly convincing” investment scams were increasing in the country and that the fraudsters were targeting citizens of retirement age.

The same programme revealed last year that fraudsters stole nearly €45 million through various scams in the second half of 2021 alone – a 37% increase on 2020.