The Deep dive: FinTech’s fight against $12.5bn fraud

By Puja Sharma

The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

Fraud losses surged to $12.5 billion in 2024

The Federal Trade Commission (FTC) reported that consumers lost over $12.5 billion to fraud in 2024, marking a 25% increase from 2023. While the total number of fraud reports remained stable, the percentage of victims who lost money jumped from 27% to 38%.

Among the most financially devastating frauds:

• Investment scams led to $5.7 billion in losses, up 24% from last year.
• Imposter scams caused $2.95 billion in damages.
• Bank transfer and cryptocurrency frauds were particularly widespread, emphasising the need for stronger fraud prevention strategies.

Who is under the radar?

Mastercard leads the charge with AI-driven fraud prevention

Mastercard is reinforcing its commitment to securing transactions by using multi-layered fraud prevention measures:

• Before transactions – Identity verification solutions prevent fraudsters from using synthetic identities.
• During transactions – AI-powered fraud detection scores 159 billion transactions in real time to identify anomalies.
• After transactions – Mastercard facilitates seamless fraud data sharing for quicker dispute resolutions.

In a major industry move, Mastercard has partnered with Feedzai, an AI-driven fraud prevention company, to roll out Consumer Fraud Risk—a first-of-its-kind solution designed to detect scams in real time.

💬 Laura Quevedo, EVP of Fraud & Decisioning Solutions at Mastercard, said:
“Fraud is evolving rapidly, and we must stay ahead. Technology allows us to detect and stop threats before they cause harm.”

Why does it matter now?

The fight against fraud is a race against time

With fraud tactics becoming more sophisticated, companies across finance and tech are stepping up their defenses:

• Visa: AI-powered Visa Advanced Authorisation and Risk Manager solutions analyse transaction patterns to flag suspicious activity in real time.
• American Express: Uses machine learning and SafeKey (EMV 3-D Secure) for extra security in online payments.
• Google & Microsoft: Deploy AI-driven fraud detection tools like reCAPTCHA and Azure threat intelligence to combat cyber fraud.
• JPMorgan Chase & Citibank: Banking giants invest heavily in AI-driven fraud monitoring to detect suspicious transactions and prevent financial crime.
• PayPal & Stripe: Use real-time fraud detection to protect merchants and consumers from chargebacks and unauthorised payments.

Collaboration is key—global organisations like FinCEN and GASA are working with banks and regulators to create comprehensive fraud prevention frameworks.

Fraud is now a $12.5 billion crisis, and it’s only growing. As scams become more sophisticated, businesses, regulators, and consumers must stay ahead by adopting cutting-edge fraud prevention technologies. From AI-powered transaction monitoring to real-time scam detection, financial institutions and tech companies are reshaping the fight against financial crime.