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Lloyds Bank fraud system detects scams before they happen

Written by: Emma Lunn
Lloyds’ hi-tech defence system, nicknamed “The Rat”, aims to identify people who may be targeted by scammers before they lose any money.

Lloyds Bank has developed a cutting-edge new tool it claims will hunt down fraudsters before they have a chance to strike.

The fraud defence system has been built by experts in fraud prevention, software engineering and data science, and Lloyds says it has already prevented fraudsters getting their hands on more than £4m.

The Rat

The system, dubbed “The Rat” uses biometrics to build up a picture of how a customer typically uses internet banking. For example, this could be how they usually move around the screen, or the time it takes them to enter their personal details. These behaviours are very difficult for a fraudster to mimic and a real-time fraud detection system helps the bank decide whether the user is the customer or a fraudster.

The Rat then combines this biometric data in real-time with software which can detect if remote access is being used to access the customer’s computer. This is a common tactic amongst scammers who will trick the victim into passing over control of their computer.

The final piece of the jigsaw The Rat looks out for a single trait which comes up time and again in scam cases – but Lloyds won’t say what it is as if it was made public then fraudsters would respond and the anti-fraud system wouldn’t be as effective.

If The Rat spots the tell-tale signs of fraud, Lloyds will freeze the customer’s account, preventing any funds from being lost, and contact the customer.

Scam prevention

Despite only being live since the end of last year, Lloyds claims The Rat has already prevented more than 1,900 customers falling victim to a scam.

Paul Davis, retail fraud director at Lloyds Bank, said: “We are working 24/7 behind the scenes every day to help keep our customers’ money safe, by innovating and analysing data in real-time to stop fraud happening in the first place. We’ve used the latest technology – biometrics, big data and artificial intelligence – long before these were even buzzwords, building our fraud-fighting armoury to give us an edge over the crooks.

“One of our latest advances has been using these three detection tactics together. Individually, they are all good spotting fraudsters, but when combined, we can spot more fraud more quickly and disrupt fewer genuine transactions.”

According to UK Finance, overall losses due to authorised push payment scams totalled £354.3m across the UK last year. Even in cases where customers are refunded, money obtained fraudulently is often used to facilitate crimes such as people trafficking and exploitation, and drug dealing.

Lloyds Bank also launched a mule-hunting team at the start of 2018 to detect and stop money mules. The team’s mission is to stop the movement of money from scams, shutting down fraudsters’ attempts to shift money using cutting-edge defences developed by specialists from across the bank. So far it has frozen £25.2m and returned more than £6.2m to victims.

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