FCA: Fraudsters use tech but so should firms to combat scams

Emad Aladhal, the director of a team of specialists working across financial crime at the FCA, said as much as fraudsters rely on technology, he hoped firms were also using this technology to improve their own controls against scams.

Speaking on the regulator's podcast, Aladhal said the FCA was seeing firms respond to the uptake of artificial intelligence.

“We are seeing firms using sophisticated technology, looking at behaviour in customers’ use of their apps to see whether it's unusual, and if so, whether that's a tell-tale of potentially a consumer being coached by a fraudster,” he said. 

“So, as much as the fraudster is using technology, we hope firms are utilising that technology and improving their controls.”

He explained fraudsters were using artificial intelligence tools to clone people’s voices.

“One particular example that's almost scary is that a parent picks up the phone call thinks it’s their son, but it's not their son. It's their voice being spoofed using that technology and made to believe that they're in trouble and in need of money.”

Those reminders, they may be simple, but actually are really powerful in changing and making a consumer pauseEmad Aladhal, FCA

One way to combat this would be to for firms to share intelligence, according to the FCA.

Firms need to help their customers not fall foul of scams but they also need to make sure that their platforms are not used by fraudsters. 

Aladhal said: “Their lessons, their approaches, the intelligence they have, they need to make sure that they are doing, in addition to the legal minimum in terms of sharing intelligence, they are actively engaged, sharing intelligence with law enforcement and through their associations, sharing typologies so that we all can learn from this and respond to it as a collective.”

Calls to the regulator regarding scams rose 193 per cent over the past five years, according to research published by the FCA earlier this year. 

Savers reported £2mn worth of scams to the FCA last year, but the data showed that an increasing number of consumers were spotting signs of a scam.

Aladhal said the FCA was seeing good practices from firms to help people avoid being caught by a scam.

For example, one good practice was asking a person to verify certain information and asking whether they have been coached into responding in a particular way before they are able to make a payment.

“Those reminders, they may be simple, but actually are really powerful in changing and making a consumer pause,” Aladhal said. 

“We see good practices also in terms of how firms react to customers who are subject to fraudsters. Not only are they responding to that particular individual case in the fraud, and helping address their concerns, but they are using it as an opportunity to learn about a typology, about a method of fraud, and then playing that approach back into how they fix their systems or improve their systems associated with that fraud.”

amy.austin@ft.com