What is push payment fraud?

Push payment fraud involves the impersonation of an individual or business, using social-engineering fraud techniques to scam third parties into the transfer of funds to fraudsters. Unfortunately, transactions made using real-time payment schemes are irreversible, because the money transfer is authorised. In contrast, people who pay via a debit or credit card usually get “chargebacks” when the products or services are not as described.

A recent case of push payment fraud shows how impersonation can not only affect your business but also your clients, who may think they are doing business with you.

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Whilst the Australian Cyber Security Centre (ACSC) and banks have increased the level of protection offered to customers, and social media platforms have invested significantly into their verification processes, they cannot guarantee 100% accuracy, and incidents like these can occur.

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What does this mean for you and your clients?

For companies with a large customer base, an impersonation like this can cause significant losses to all parties involved. Not only will the company incur costs associated with notifying existing and prospective customers of the fraudulent transactions, but they may also decide to reimburse affected customers as a sign of “goodwill”, in an effort to limit reputational damage.

To help limit the impact of reimbursement and PR costs, businesses can consider a cyber liability policy with cover for push payment fraud. As the cover is not automatically included in all policies, ensure you “opt-in” when speaking to your broker.

With you all the way

Feel free to reach out if you are interested in cyber liability or require a review of your existing policy to ensure adequate coverage is in place.

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