Visa’s $350 million scam crackdown: How data and new strategies are beating fraud

The news: Visa recently formalized a scam disruption practice department that saved credit scam and fraud victims $350 million last year, it stated in a press release. Visa Scam Disruption (VSD) also helped its Visa Payment Ecosystem Risk and Control (PERC) block over $40 billion in attempted fraud.

It’s Visa’s latest effort to curb the rising threat of payment scams using cybersecurity companies’ detection methods to determine gaps that criminals use to exploit consumers and businesses.

Visa gets serious about scams: “Visa has invested over $12 billion in technology over the last five years, including to reduce fraud and enhance network security,” said Paul Fabara, chief risk and client services officer at Visa.

• The company is using proprietary technology developed by its VSD to sniff out potential scams.
• It hired professionals from law enforcement and the military, as well as data scientists to devise new ways to combat scams.
• Visa is also leveraging partnerships with financial institutions and law enforcement agencies to disrupt the scam network infrastructure.

Key stat: Consumers reported more than $12.5 billion in losses due to fraudulent transactions in 2024, a 25% YoY increase, per the Federal Trade Commission (FTC). Imposter scams were the most widely reported. 

Bad romance: In one instance of a recent imposter scam, bad actors used phishing links on dating platforms to enroll victims in recurring billing cycles, Visa discovered. 

• The scammers impersonated real people, gained their victims’ trust, and even requested background checks before meeting. Victims were led to fake ID verification sites that set up recurring transactions.
• By analyzing transaction and IP data, Visa mapped and shut down nearly 12,000 fraudulent merchants linked to fake background check sites, preventing over $37 million in losses last year.

Our take: ​​Visa’s war on scammers offers a proven blueprint for combating scam-related losses. Preventing $350 million in losses is a demonstrable outcome that exemplifies the benefits of proactive detection, data analysis, and multi-agency collaboration methods.