Banks and telecoms launch shared platform to track fraudsters

Canada's major banks and telecom companies are launching a platform that allows them to share internal intelligence about fraudsters trying to steal money from consumers and institutions.

The Cross-Sector Anti-Fraud Exchange, or CSAFE, will be operated by EnStream LP, an identity-verification company owned by Canada's three largest wireless carriers.

The initiative began with a pilot project between Canadian Imperial Bank of Commerce and Rogers Communications Inc. Since then, several other big banks, Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and National Bank of Canada, as well as Desjardins have signed on. BCE Inc.'s Bell Canada and Telus Corp. are also participating.

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"The goal is, let's eliminate or minimize that repeat fraud across organizations," said Upinder Saini, president and chief executive officer of EnStream, in an interview ahead of Wednesday's announcement about CSAFE's launch.

Saini said the initiative started with the realization that the same fraudsters were targeting multiple companies, for instance by opening accounts at multiple banks and telecoms.

The initiative is the latest industry effort aimed at staunching the flow of hundreds of millions of dollars annually out of the Canadian economy and into the hands of fraudsters, often international organized crime groups.

Fraud victims reported $351 million in losses to the Canadian Anti-Fraud Centre in the first six months of this year, a figure that represents just the tip of the iceberg. The centre estimates that only 5 per cent to 10 per cent of frauds are reported.

Companies using the CSAFE platform will input information about confirmed fraudsters into it, which other members of the platform can use to inform their own decision making.

"Whether they are onboarding somebody or they are authenticating somebody, or there are some transactions that their customer is conducting, they could check with the platform if a particular incident is known to the exchange," Saini said.

Saini said the platform complies with Canadian privacy laws because it's limited to confirmed fraudster intelligence; victim data is not shared.

He hopes that CSAFE will expand to include other sectors as well, such as digital platforms. "The plan is that we will continue to grow and welcome additional participants," he said.

Ottawa recently completed consultations on a national anti-fraud strategy, signaling that it believes a cross-sector approach, one that includes telecoms, digital platforms and financial institutions, is needed to combat the surge in scams and other types of fraud.

Tech giants Google and Meta are members of the Canadian Anti-Scam Coalition, which also includes banks, telecoms, government and law enforcement agencies. That cross-sector coalition, which launched last year, was spearheaded by Anthony Ostler, president and CEO of the Canadian Bankers Association.

With files from The Globe and Mail