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How a fintech start-up helped police bust a credit card fraud syndicate

SINGAPORE — The group of alleged fraudsters had managed to rack up transactions worth S$96,600, but within just two months, four of them had been arrested and charged in court.

Twelve mobile phones, several YouTrip Mastercards and ATM withdrawal receipts were seized by police as case exhibits.

Twelve mobile phones, several YouTrip Mastercards and ATM withdrawal receipts were seized by police as case exhibits.

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SINGAPORE — The group of alleged fraudsters had managed to rack up transactions worth S$96,600, but within just two months, four of them had been arrested and charged in court.

This was thanks to the quick work by mobile wallet company YouTrip, which began detecting suspicious activity on its system in late December.

The Singaporean financial technology start-up, a unit of Hong Kong-based You Technologies Group, was able to investigate the issue, trace the source of the suspicious activity to a few individuals and hand over their information to the police by Feb 1.

On Tuesday (Feb 12), the police said they had arrested three men and a woman, aged between 24 and 32, for their suspected involvement in a syndicated credit card fraud.

The police said their preliminary investigations uncovered at least 18 suspicious account users and 85 fraudulent credit card top-up transactions amounting to more than S$96,600.

These four were charged in court on Wednesday for unauthorised access to computer material.

The police are investigating another 15 suspects.

For You Technologies, this whole incident was no surprise, as payment fraud happens more often than most people are aware of, said Singapore country manager Kelvin Lam.

This was why the company was “adamant” on having their fraud monitoring systems in place before launching the YouTrip app here in August, he added.

“We expected that these cases may occur every day, and were prepared for it, and we knew the chances of it happening would only increase as we continue to grow our base,” he said.

“It is our responsibility as a payment operator to stay vigilant, and we will continue to explore new security enhancements using data and technology.”

HOW YOUTRIP SPRANG TO ACTION

YouTrip is a mobile wallet application that allows users to pay in multiple currencies with a prepaid Mastercard, with no currency conversion fees

In late December, its fraud monitoring system began flagging suspicious activity on accounts that received high top-up amounts which were then immediately depleted by purchases or cash withdrawals.

These accounts also had high frequencies of failed top-ups due to incorrect credit or debit card credentials.

The company then set up a task force of about 10 engineers and fraud monitoring specialists from within the company to investigate the transaction patterns using data analytics.

When looking for fraudulent behaviour, their fraud monitoring team generally looks for common patterns, Mr Lam told TODAY.

One commonality it detected was a concentration of transactions at the same overseas ATM locations.

“In general, criminals would want to conduct transactions overseas because it makes investigations harder,” said Mr Lam.

The suspicious accounts were promptly suspended “as soon as in January”, he said.

This, among other information the team dug up through their investigations, gave YouTrip enough evidence to lodge a formal police report on Feb 1, which led to the suspects being arrested less than two weeks later.

“We are also working with relevant institutions to ensure a proper arrangement for the affected individuals in this case,” Mr Lam said.

“YouTrip users can rest assured to continue to use YouTrip as per normal, as the suspicious activities have been contained to the current identified suspects.”

FRAUD HAPPENS EVERY DAY

Still, Mr Lam added: “We want to educate the public that fraud happens every day.”

The company issued a statement after the arrests to publicise how it had uncovered the fraud, and Mr Lam believes more financial firms should strive to be more open and transparent with the public.

“Companies shouldn’t be afraid to be publicised,” he said, as notifying the public about fraud cases helps to remind people to be vigilant, while alerting potential criminals that card operators and law enforcement are not blind to such activities.

Once credit card fraud has happened, how soon an individual becomes aware of it plays an important role in limiting the consequences, he added.

To help, the YouTrip app sends notifications to users about suspicious activities and allows users to suspend their cards immediately in one click, without having to call anyone.

YouTrip has also since rolled out a security update to require one-time password (OTP) verification whenever a new credit or debit card is added to an account.

HOW TO STAY VIGILANT

The Police advise all credit or debit card holders to adopt preventive measures against unauthorised use of their cards:

a. Opt for SMS OTP verification for purchases or charges to credit/debit cards;
b. Opt for an SMS to be sent to your handphone for any charges incurred on your credit/debit card;
c. Check bank statements and alert the bank immediately should there be any discrepancies or fraudulent charges; and
d. Do not give out your credit/debit card details to strangers.

“Fraud prevention and security will continue to be YouTrip’s core mission to our users. We will continue to work closely with the authorities and community to ensure a secure and seamless payment experience for all YouTrip users,” said Mr Lam.

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