As I’m from Germany I wanted to learn a bit more about the online banking security in the U.S. (to properly bait scammers targeting the U.S.), so I had a little chat with my GPT-Jedi.
Here’s the summary of that discussion and some questions at the end.
Online Banking Security: US vs. Germany and Global Trends
Background
- Online banking security varies widely across different countries, with some nations implementing stricter regulations and protocols than others. Germany, for example, stands out for its rigorous security measures compared to the US.
Differences in Online Banking Security: Germany vs. US
Germany: Online banking is highly secure in Germany, thanks to regulations like the European Union’s PSD2. This requires Strong Customer Authentication (SCA), which ensures that online transactions must be authenticated with two-factor or multi-factor methods (e.g., mobile apps, hardware tokens). Without using these stricter security measures, opening a bank account is not possible.
United States: In contrast, US banks offer optional security features like two-factor authentication (2FA) or biometric authentication (face recognition, fingerprints) but do not mandate them for every user and they are not free of charge! Some services allow online transactions without strict verification, making accounts more vulnerable to fraud.
Impact on Scams
- Refund Scam: In the US, scammers can often transfer funds internally between accounts without re-authentication, which makes scams like refund fraud more likely to succeed. The scammer can easily perform transactions on behalf of the victim while pretending to “refund” too much money. In Germany, these types of scams are harder to pull off, as SCA is required even for internal transfers.
Other scams that may be affected:
- Phishing scams, where scammers impersonate bank representatives and ask for account details to make fraudulent transfers.
- Account takeover scams, where scammers access victims’ accounts and transfer funds to their own.
Other Countries
United Kingdom: Like Germany, the UK has adopted strong banking security measures due to PSD2, requiring two-factor authentication for all online transactions. This significantly reduces the risk of fraud compared to countries that do not have such regulations in place.
Other Global Trends: While Europe (especially Germany and the UK) leads the way with banking security, other countries have varying levels of security. Some countries are still largely reliant on traditional methods like passwords or weak verification systems, which are more susceptible to fraud. However, many countries are beginning to adopt stronger authentication methods as technology evolves.
Some questions
- If anyone here is from Germany: Have you seen refund scams over here as well?
- Do you know of any activities from the U.S. banks to adopt stronger security measures to reduce the risk of scams like the refund scam?
- As scambaiters with more XP: How quick will scammers adapt to stricter security measures?
- Do you know other scams that benefit from these security differences?