Combating API-based payment scams in the UK

An innovative cross-industry initiative combining mobile network data with banking systems has emerged as a potential game-changer in the fight against authorised push payment (APP) fraud, which cost UK consumers £213.7 million in the first half of 2024 alone.

The new API-based platform, Scam Signal, represents an unprecedented collaboration between the UK’s leading mobile operators and banks, spearheaded by industry bodies GSMA and UK Finance. The service leverages real-time network data analysis to identify suspicious patterns between phone calls and fraudulent bank transfers, addressing a critical vulnerability in the UK’s payment infrastructure.

Early results are promising. A three-month pilot project led by Vodafone demonstrated a 30% improvement in scam detection at a major UK bank, highlighting the potential of cross-industry data sharing in combating financial crime.

The timing is critical, as telecommunications-initiated scams now account for 35% of APP fraud losses. Criminals increasingly exploit telecoms channels, masquerading as legitimate organisations such as banks to manipulate customers into transferring funds.

“Fraud remains a major problem, with our data showing that over £210 million was stolen by criminals through APP fraud in the first half of 2024. APP fraud originating from telephone calls or SMS continues to be of higher value and accounted for 35 per cent of losses,” says Dianne Doodnath, Principal of Economic Crime at UK Finance.

“To address social engineering tactics used by criminals, cross-industry collaboration has once again proven critical. Working with GSMA has been invaluable in making UK mobile network operators available to support and analyse data with our financial services members. This collaboration has resulted in a strong solution that should have a real impact by identifying criminal activity and increasing fraud detection”.

The initiative brings together major industry players, with EE, Virgin Media O2, Three, and Vodafone joining forces with financial institutions such as NatWest. This collective approach marks a significant shift from traditional siloed fraud prevention methods.

The platform’s development followed extensive workshops between mobile network operators and bank representatives, during which they identified correlations between network data and fraudulent transfers. This intelligence formed the foundation of the Scam Signal solution, which is delivered through an Application Programmable Interface (API).

Brian Gorman, Fintech Lead at GSMA, notes that “Scam Signal is already detecting fraudulent calls and stopping transactions to criminals. Delivering this solution was made possible by the close collaboration between our members and UK Finance and its members,” emphasising the immediate impact of the solution.

The initiative builds on the momentum of GSMA’s Open Gateway Initiative, launched at MWC Barcelona in 2023, which promotes the development of common operator APIs. This broader push towards API-driven solutions suggests a future where cross-industry collaboration becomes the norm in fighting financial crime.

However, industry experts suggest more comprehensive measures may be needed. Virgin Media O2 has called for the appointment of a dedicated fraud minister and the creation of a centralised national policing body to investigate all fraud instances, highlighting the scale of the challenge. Their research indicates that 69% of Britons report being targeted by scammers, underlining the pervasive nature of the threat.

As the financial services sector continues to digitise, this API-based approach to fraud prevention could serve as a model for future cross-industry security initiatives, demonstrating how shared technology infrastructure can help protect consumers from increasingly sophisticated financial crimes.

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• Financial Crime
• Fintech