We make loans exclusively to servicemembers. In our recent banking department audit, we were told we do not have sufficient protection to avoid fraud in our payment app. This app was launched a couple of years ago, and we did not think there was a problem.
Until, that is, the CFPB contacted us about getting a consumer complaint about it. We found out that a group of fraudsters had copied the way our payment app looks and acts, which caused servicemembers to be lured into fraudulent transactions.
The result of that complaint was a big update to the payment app, adding a lot of additional consumer requirements to do transactions. We constantly monitor the payment app and have updated our monitoring and testing procedures.
We still don't know the extent that the complaint affected our business. Being a lender to servicemembers, we want to ensure that our payment app is fully capable of ferreting out fraud. We hope you can provide some insight into how payment apps cause fraudulent transactions.
What challenges do servicemembers face due to fraud caused by payment apps?
How can we ensure that our digital payment app protects servicemembers from fraud?
