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Fraud detection system uses behavioural analysis to block scams

Sophisticated technology used by bank stops fraud in real time

Lloyds Bank claims its anti-fraud system called “the Rat”, has prevented 2,100 customers falling victim to online scams since going live in late 2018.

The technology works in real time by analysing signs of unusual behaviour when customers log into their online banking profiles – sometimes while they are on the phone to the scammer.

Speaking about the Rat – a “sophisticated behavioural analysis” tool that learns the patterns of its customers online banking habits – Lloyds bank said its system was a “new approach” to preventing online fraud.

The retail fraud director at the bank, Paul Davis added: “This is quite a new approach. We've got great results really quickly and we found that it was detecting fraud very pro-actively.

"We were having some quite amazing conversations with customers who were in the middle of being scammed, and we were able to stop it."

The bank claims the technology is able to figure out whether someone is logging in as a customer or as a fraudster – by seeking out giveaway signs that do not match its customers’ online behaviour.

It says the system can intelligently tell by the time it takes for a customer to enter their personal details for example and match it to a predetermined learned pattern of behaviour, to determine if fraud is taking place.

If suspicious activity is detected, the Rat system looks at whether the customer's computer is being accessed remotely. Scammers often trick people into passing over control of their computer, it says.

There are other signs the behavioural analysis tool looks for but these have not been disclosed for security reasons..

The bank says its behavioural learning tool had blocked the account of an elderly customer who had been tricked by a scammer – while he was still on the phone to them.

The scammer had managed to convince the elderly man he was ringing from BT about a fault with his internet – and attempted to set up external payments via his online banking.

The Rat system had picked up the suspicious activity and blocked the account all in real time – and no funds were lost.

Tactics used by scammers have become increasingly sophisticated, with fraudsters now resorting to posing as banks and the police to trick people into transferring the cash themselves.

This tactic - known as “authorised push payment scams” – totalled £354.3 million in the UK last year, according to UK Finance. 

Despite banks introducing a voluntary code of conduct that would offer increased protection from scammers in May – which includes reimbursement to blameless victims - money obtained fraudulently is often be used to facilitate crimes such as people trafficking and exploitation.

Which? estimates that £674 is lost every minute to bank transfer scams with victims losing a total of £354m last year, most of it stolen from customers’ personal accounts.

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