How Fraud Affects Customer Experience

Your fraud detection system might be costing you customers. Not because it's failing to catch fraud, but because it's flagging too many legit people in the crossfire. Every false positive chips away at trust. Every blocked transaction slows someone down. Every “yes, that really was me” forces a customer to do work your systems should handle on their own. Fraud detection is becoming a huge customer experience problem that’s showing up in satisfaction scores, support tickets and churn rates - but Barclays tried something different. They built an ML fraud engine that thinks in milliseconds and behaves more like a human analyst. Crucially, it’s accurate enough to avoid the false positives that break trust. Continuous feedback loops let the system learn from errors - model retraining, testing, error audits. This is the kind of disciplined practice that prevents AI drift and keeps performance sharp. And when they do block a transaction, they can explain why. Not with vague "suspicious activity detected" messages, but with actual reasoning: "this differs from your normal spending pattern because X, Y, Z." Most fintechs treat fraud as a backend compliance function. They build systems that are “robust” and “aggressive,” then wonder why trust drops and complaints spike. Great systems balance two opposing forces – blocking bad actors without punishing good users. Most banks optimize for security first and try to smooth friction later. Barclays did the opposite. They designed for customer experience from the start, and built security into that foundation.

How a pair of worn Sneakers taught us a hard lesson in E-commerce fraud. Years ago, I worked at a flash sales company. For those unfamiliar: flash sales offer deep discounts on premium products for a short time, usually to clear unsold inventory from big brands. Customers love it. Brands move stock. Everyone wins, until something breaks. During a routine support review, our fraud prevention team noticed a strange complaint: a member received what he claimed were used sneakers instead of the brand-new pair he ordered. Odd. But not isolated. A similar complaint, same brand, same product, had popped up a few months earlier. We explored all the usual suspects: - Brand error? Unlikely. The inventory had never left their warehouse. - Internal issue? No sign of tampering. Our warehouse was automated and secured. - Shipping problem? The customer remembered opening a fully sealed package. That left one path: the return flow. At the time, returns were still handled manually. When we looked closer, a pattern emerged. A small group of customers had figured it out. They bought iconic sneakers, wore them for a while, then ordered the same pair during the next flash sale. When the new box arrived, they simply swapped in the worn pair and returned it in the pristine packaging. Our team processed it without suspicion, and the used sneakers got sent to the next buyer. It was smart. Subtle. And it worked, until it didn’t. The point is this: fraud doesn’t always come through the front door. Sometimes it hides in operational blind spots. It targets the low-friction areas of your business, the ones built on trust and speed. We fixed the issue, trained the teams, added safeguards. But the story stuck with me. Because every generous policy, if unchecked, can be turned into a playbook. Let fraud prevention in e-commerce be more than just tech. Look at your processes. Your people. Your incentives. That’s where the real cracks begin.

Throwback to a conversation I had about two years ago on payments security with Candice Pressinger, Director of Customer Data Security Elavon as part of the MPE talk Series🤩. It’s striking how the way we framed that discussion mattered as much then as it does now. For context, at the time, we talked about how the role of security had shifted away from a pure compliance definition and how security, fraud, and optimisation had effectively collapsed into the same box. For a long time, merchants met the required standard, passed the audit, and made sure nothing was obviously wrong from a regulatory point of view. It was important, but when security was framed purely as compliance, it sat slightly to the side of how payments actually performed day to day. Fraud was usually handled separately. It relied on rules, blacklists, and investigation after something had already gone wrong. The focus was on stopping known patterns and cleaning up the mess once losses appeared. Optimisation lived somewhere else again, usually with payments or growth teams. That’s where approval rates, conversion, checkout flow, and customer experience were discussed, often without much connection to security decisions. That separation doesn’t survive in practice, because the same payment decision affects all 3 areas at the same time. They are different sides of the same decision. ▪️When merchants tighten their security control, they might reduce fraud, but they may also introduce friction that costs conversion. ▪️When steps are removed to make the checkout frictionless, the approval rates can improve, but the exposure may increase. ▪️Even something as simple as how a transaction is routed or how the authentication is applied can change liability, cost, and customer drop-off in one go. At the same time, merchants are expanding payment choices. More wallets. More APMs. More markets. More AI-driven flows. Each new payment option can improve customer experience and unlock growth. But each one also expands the attack surface. Fraud doesn’t chase innovation itself. It looks for inconsistency, uneven controls, and weak links between systems. That’s why there are increasingly pressure on areas that weren’t traditionally treated as high-risk, like loyalty points, stored value, and secondary accounts. #fraud #paymentsecurity #PaymentLeadership Elavon Europe Merchant Payments Ecosystem -- 𝘗𝘢𝘺𝘮𝘦𝘯𝘵𝘴 𝘪𝘴 𝘯𝘰𝘵 𝘢 𝘤𝘰𝘴𝘵 𝘧𝘶𝘯𝘤𝘵𝘪𝘰𝘯. 𝘐𝘵’𝘴 𝘢 𝘥𝘦𝘴𝘪𝘨𝘯 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯. 𝘐 𝘸𝘰𝘳𝘬 𝘸𝘪𝘵𝘩 𝘵𝘦𝘢𝘮𝘴 𝘳𝘦𝘴𝘩𝘢𝘱𝘪𝘯𝘨 𝘩𝘰𝘸 𝘵𝘩𝘦𝘪𝘳 𝘱𝘢𝘺𝘮𝘦𝘯𝘵 𝘢𝘳𝘤𝘩𝘪𝘵𝘦𝘤𝘵𝘶𝘳𝘦 𝘥𝘦𝘵𝘦𝘳𝘮𝘪𝘯𝘦𝘴 𝘤𝘰𝘴𝘵, 𝘤𝘰𝘯𝘵𝘳𝘰𝘭, 𝘳𝘦𝘴𝘪𝘭𝘪𝘦𝘯𝘤𝘦, 𝘢𝘯𝘥 𝘢𝘤𝘤𝘰𝘶𝘯𝘵𝘢𝘣𝘪𝘭𝘪𝘵𝘺. 𝘛𝘩𝘪𝘴 𝘸𝘰𝘳𝘬 𝘩𝘢𝘱𝘱𝘦𝘯𝘴 𝘢𝘵 𝘴𝘺𝘴𝘵𝘦𝘮 𝘭𝘦𝘷𝘦𝘭, 𝘯𝘰𝘵 𝘧𝘦𝘢𝘵𝘶𝘳𝘦 𝘭𝘦𝘷𝘦𝘭. 𝘓𝘰𝘰𝘬𝘪𝘯𝘨 𝘧𝘰𝘳 𝘪𝘮𝘱𝘢𝘤𝘵 ? 👉 intro@paypr.work #payprwork #paymentstrategy #card #acquiring Merchant Hub: Merchant Voice, Amplified! Paypr.work [ˈpeɪpəwəːk]

Stop calling customers over fraud. In 25 years of fighting online fraud, I’ve seen seismic shifts in both attacks and defenses in US banks - but one thing hasn��t changed: Banks still call customers to verify fraud. In 2026, that’s one of the worst ways to fight financial crime. Here’s why: ⚠️ The Verification Paradox You'll be surprised: by now, customers got pretty good at spotting shady links and fake domains. But on a phone call, they have zero visual cues. Caller ID is the only “signal” - and it’s trivially spoofed. To a customer, a real bank call and a scam call look identical. ⚠️ The Black Hole Syndrome People don’t answer unknown or even “verified” numbers anymore. Robocalls trained them not to. The result? Low response rates, alerts lacking crucial context, and customers left in the dark. High manual effort with little payoff. ⚠️ Calls Can Backfire If account details were changed, your “verification” call may go straight to the criminal - defeating the entire purpose. ⚠️ Line Saturation Tactics Scammers now keep victims’ lines busy with nonstop calls or lingering connections, blocking real phone outreach by your team. ⚠️ The Wrong Message Calling teaches customers a dangerous habit: that it’s OK to discuss finances with a random voice on the phone. Bottom line: Phone calls don’t protect customers. They put them in a high-pressure, low-signal environment where criminals have the advantage. So what should replace them? 📲 Digital, Automated, Multi-Channel Move fraud outreach into automated, multi-channel digital flows. Reach customers through several channels at once - it's the most effective way to get the message across. 👥 Don’t Single Out the Customer Contact all valid parties at once. Criminals can’t do this unless they’ve already taken over the account. 🧠 Intelligent Orchestration Time, channel, message, and policy should adapt by risk, priority, and customer segment. It's not a one-size-fits-all script. Stop calling customers over fraud. It’s bad for them. #FraudPrevention #DigitalBanking #FinancialCrime #CustomerExperience

💬 “My mind frame was that I could not trust my own bank.” That sentence hit me like a ton of bricks. In 2022, a scammer posing as Europol stole €35,000 from a victim over the course of just 2.5 days. The tactics were textbook—pressure, fear, isolation, remote access, fake officials, fabricated investigations, and “just one more wire.” But the trigger wasn’t the script. The trigger was mistrust. The victim already had doubts about their financial institution—and the scammers knew exactly how to exploit that. When the victim called the bank to stop one of the wires (due to a delayed receipt), the bank asked no questions. 👎 No red flags were raised 👎 No one asked about the purpose of the transfer 👎 No intervention, just more automation That vacuum of trust was all the scam needed to thrive. 🧠 Here’s the hard truth: We are either earning trust or eroding it—every single day. People choose our financial institutions for a reason. But are we proving, through our actions, that we’re worthy of that trust? ✅ Do our systems and humans recognize distress patterns? ✅ Are we asking the right questions before moving large sums? ✅ Are we equipping our teams to pause, probe, and protect? And just as critically: 🔍 Are we educating our customers about how these scams work? 🔍 Are we providing transparency about real-world risks—without fear, but with clarity? 🔍 Are we giving our members and customers the knowledge to pause, question, and call us when something feels off? 🛡️ Trust is built before the scam call ever comes. Let’s do the work now—not just with smarter systems, but with proactive conversations, clear communication, and a culture of care. Let’s be the financial institution that prevents the loss—because we earned their trust and helped them spot the scam. Operation Shamrock Erin West #FightFraud #FinancialSecurity #ScamAwareness #FraudPrevention #TrustAndSafety #PigButchering #BankingResponsibly #CustomerEducation #EmpoweredConsumers #ShamrockSurvivorStories

𝗧𝗵𝗶𝘀 𝗣𝗼𝘀𝘁 𝗜𝘀 𝗡𝗼𝘁 𝗔𝗻𝗼𝘁𝗵𝗲𝗿 "𝗙𝗿𝗮𝘂𝗱 𝗶𝘀 𝗚𝗿𝗼𝘄𝗶𝗻𝗴 𝗘𝘅𝗽𝗼𝗻𝗲𝗻𝘁𝗶𝗮𝗹𝗹𝘆" 𝗪𝗮𝗿𝗻𝗶𝗻𝗴 It's not new news that payment fraud is rising rapidly, and the last thing you need is more stats confirming the problem with warnings to "do something" about it. A new research report from Cornerstone Advisors (written by yours truly), commissioned by Quavo Fraud & Disputes, takes a different tack: To prove the importance and impact of the fraud resolution experience on consumers’ banking relationships. We developed a fraud dispute/resolution process evaluation methodology, and then surveyed consumers who have experienced payments fraud in the past few years (it would've been harder to find people who haven't), and asked them to rate their experience. Take a look at the (always) complimentary report (link in the comments) to see the details on which parts of the process were rated as strengths or weaknesses. Our assessment methodology rewarded providers who provided a “very” easy process with “very” clear information in a “very” fast timeframe and penalized those who only provided a “somewhat” good process. The differences might feel like shades of gray, but they have strong implications on cardholders’ behaviors and attitudes, specifically on their: 1️⃣ 𝗖𝗼𝗻𝗳𝗶𝗱𝗲𝗻𝗰𝗲. Among consumers who rated their fraud experience an A, 87% said the experience made them much more confident in their provider’s ability to protect their account. The percentage dropped to 79% among those who graded their experience a B and to 55% among those rating the experience a C. 2️⃣ 𝗖𝗮𝗿𝗱 𝘂𝘀𝗲. Nearly 4 in 10 consumers who rated their fraud experience an A use the card involved more frequently following the fraud experience, in contrast to 20% who rated their experience a B and 12% who rated their experience a C. 3️⃣ 𝗟𝗶𝗸𝗲𝗹𝗶𝗵𝗼𝗼𝗱 𝘁𝗼 𝗼𝗯𝘁𝗮𝗶𝗻 𝗺𝗼𝗿𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀 𝗼𝗿 𝘀𝗲𝗿𝘃𝗶𝗰𝗲𝘀. Eight in 10 consumers who rated their fraud experience an A said the experience improved their likelihood of obtaining more products or services from the provider, compared to 59% who rated their experience a B and 39% who rated their experience a C. 4️⃣ 𝗟𝗶𝗸𝗲𝗹𝗶𝗵𝗼𝗼𝗱 𝘁𝗼 𝗼𝗯𝘁𝗮𝗶𝗻 𝗺𝗼𝗿𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀 𝗼𝗿 𝘀𝗲𝗿𝘃𝗶𝗰𝗲𝘀. Overall, 83% of consumers who rated their fraud experience an A said the experience strengthened their relationship with the provider, in contrast to 69% who rated their experience a B and 46% who rated it a C. The results are clear: The better the fraud resolution experience, the more confident cardholders are in issuers’ ability to deal with #fraud dispute and resolution, the more cardholders will use the card, and the more likely they are to do more business with an issuer.