The 2024 Payment Systems Report, released today by the Bank of Portugal (BdP), indicates that electronic payment fraud in Portugal remains very low, below the levels recorded in the European Economic Area, although it has seen a slight increase.
In the first half of 2024, there were 129 fraudulent card transactions per million operations from the issuer’s perspective, which is lower than the 156 fraudulent operations per million observed during the same period the previous year.
The average fraud amount was 58 euros, rising from 47 euros in the first half of 2023.
For regular bank transfers, 16 fraudulent operations were reported per million transactions, an increase from six the previous year. The average fraudulent transfer amount was 3,118 euros, slightly up from 3,086 euros.
Direct debits exhibited the lowest fraud rate, with just 0.4 fraudulent operations per million transactions, and the average fraud amount dropped to 493 euros from 648 euros in the first half of 2023.
The Bank of Portugal emphasizes that card transactions using strong customer authentication experience significantly lower fraud levels compared to those without this security feature.
Regarding credit transfers, BdP reports that fraudsters often employ “social engineering strategies,” manipulating clients into initiating transactions for them or obtaining strong authentication credentials. Tactics include fraudulent emails or links directing users to fake websites, or scams like the ‘Hello Dad/Hello Mom’ scheme.
Total losses in the first half of 2024 increased to 8.9 million euros, up from five million euros in the corresponding period of 2023, according to the previous report.
The BdP notes that card-related fraud losses decreased in the first six months of 2024, while credit transfer-related losses rose.
As for liability, the Bank of Portugal clarifies that customers bear the losses when transactions are initiated by them or result from improper sharing of security credentials or personal data. In “other situations,” payment companies predominantly bear the losses.
In May 2024, a new feature called beneficiary confirmation was introduced, allowing users to verify the recipient’s name before finalizing a money transfer.
The BdP suggests this beneficiary confirmation has significantly reduced fraud associated with transfers, particularly schemes like ‘Hello Dad, Hello Mom.’
According to the banking regulator and supervisor, after introducing this feature, there was a notable reduction in fraud involving credit and immediate transfers by 77% in the first three months following implementation.
In 2023, there were 83.3 million beneficiary confirmation consultations.
