Bank frauds committed online are becoming more and more common, and criminals are constantly coming up with new methods. The biggest problem with fraudulent transactions is usually time, because if we don’t react quickly enough to a scam, we can just run after our money.
This has been the case so far, but from August a significant change may come as a result of a new law, which, in short, serves the purpose of the money of customers who have suffered abuse can be “blocked” in time. In accordance with the relevant directives of the European Union, payment service providers must suspend transactions for which they deem it necessary to take action from the Financial Information Unit (FIU) operating as part of the National Tax and Customs Administration (NAV), and about which they are obliged to notify the FIU immediately.
Along the lines of this procedure, but separated from it, a new type of notification and blocking procedure will come into effect from August
– announced the Ministry of National Economy (NGM).
The number of frauds decreased last year, but has risen again this year
According to the latest full-year data of the Magyar Nemzeti Bank (MNB), although the sharp increase in the number of bank transfer frauds and their value since the beginning of 2022 has stopped, the number of bank card frauds unfortunately continued to increase even in the fourth quarter of last year.
Last year, there were 18,296 successful frauds in electronic money transactions, and the figure is even more frightening than the number of attempts: fraudsters attempted 60,509 times, according to data from the Magyar Nemzeti Bank (MNB). In 2023, the victims were harmed with an annual total of HUF 23.2 billion, no means the theft of HUF 50,000 per minute.
In the first quarter of this year, 65 percent more such crimes were committed than in the same period last year. The number of successful bank card frauds was close to 57,000, of which fraudsters caused HUF 2.7 billion in damage.
An individual with a bank account lost an average of HUF 1.3 million, while a business lost HUF 31 million in the first quarter if they fell for the fraudsters.
Having problems with immediate payment?
The instant payment system allows customers to receive money from the sender or payer to the recipient immediately, in practice within a few seconds. This is positive from a convenience point of view, as we can transfer money or send a payment request, for example, with the same speed as paying by bank card.
Fraudsters also take advantage of this technology, because due to the accelerated digital banking, the stolen money also goes to the criminals’ accounts sooner. The new notification and blocking procedure is based on the efficient and rapid exchange of information between customers, payment service providers and authorities.
Unique modelIn March 2020, with the introduction of the instant payment service, a new time calculation began in domestic banking. By the way, this is considered an internationally unique model, thanks to which consumers can continuously enjoy the benefits of transfer transactions carried out in 5 seconds on any day of the year.In reality, the majority of transactions reach the partner’s account in an average of 1.2 seconds. By the way, this service only applies to HUF-based transfers, it is not yet available in the case of euros, but there are already proposals for solutions in this regard as well.
What does the process look like from August?
After detecting fraud, the customer or the investigative authority first notifies the customer’s account managing bank. After that, the bank managing the account informs the payment service provider of the person to whom the money was transferred about the following: the fact of the notification, the name and account number of the paying party and the beneficiary, the currency, amount and date of the payment operation.
In parallel with this process, the payment service providers report to the NAV financial information unit and, where applicable, also suspend the accounts.
The new regulation applies not only to traditional banks, but also to all payment service providers, including fintechs (such as Revolut and Wise).
It is not a panacea, protection will continue in 2025
Blocking the money will not be an easy task, as strict procedures will have to be developed for each bank individually. Of course, the new procedure of the ministry does not mean complete protection either, because criminals take the money from the blocked account extremely quickly.
Next July, a central system to prevent and filter abuses will also start operating, which will operate within the framework of the Bank Interbank Clearing System (GIRO). It is important that a Central Abuse Prevention System (KVR) it will not replace, but complement the banks’ fraud screening systems.
GIRO’s long-term goal is to ensure that the customer’s payment transactions that are relevant to fraud are channeled into the system and subjected to central investigation.
The system will work with the help of artificial intelligence (AI), which evaluates the degree of fraud risk of transactions in real time, which is also indicated in real time to the banks involved – AI will also significantly speed up the reaction time of the banks. From July 1, 2025, all HUF-based transfers must be run through the KVR system by banks from July 1, 2026.
Source: www.economx.hu
