The AI boom has ushered in a new era of fraud. From bot attacks and malware to tampered ads, deepfakes and rent scams, fraudsters utilize social engineering and increasingly sophisticated tools to target their victims. So what does it mean for institutions and students — and how can you ensure secure payments?
Convera’s webinar “Navigating the Spectrum of Student Fraud” explores technology’s impacts on education fraud and scams, and highlights steps institutions can take to prevent and mitigate student fraud.
Keeping up with fraudsters
According to a study by Featurespace, 70% of North American financial institutions experienced an increase in fraud rates in 2023 alone. In the UK, fraud accounts for a whopping 40% of all crimes.
living crisis and the ubiquity of social media. More people are vulnerable due to difficult economic circumstances, so more are drawn to provide personal information like credit card information and a social security number as part of a scam — and international students are particularly vulnerable. “We are often seeing students becoming money mules,” she says.
Institutions such as the University of Connecticut have also noticed a change in common fraud methods. Fraudulent credit card payments have evolved into fraudulent ACH payments, explains Alyse Lofman-Kwapien, Director of Cash Management and University Bursar at UConn.
Amid the shifts, a single trend is consistent: fraud happens fast and is constantly evolving. Staying on top of these rapid changes is one of the biggest challenges universities face and a critical step in mitigating and preventing fraud.
Prioritizing simplicity and strict rules
Nathan Harvey, Campus Cards System Manager at the University of Reading in the UK, identified a common problem with university payment systems: the process is explained in complicated terms to students with a winding journey to final payments. Confusion is one of the pressure tactics that breeds vulnerability to fraud.
The solution? Simplify the instructions, don’t use too much financial language, and streamline the user journey to payment.
Harvey also advises institutions to “stick to your guns.” By catering to the students’ perceived payment needs, universities are creating more vulnerabilities in the payments loop. Instead, Harvey recommends institutions set rules, stick to them, and let students abide by them.
Harvey and Lofman-Kwapien agree that keeping it simple and straightforward for students and institutions is the best course. They outline two key strategies:
- Refuse bank transfers. With fraudulent ACH payments on the rise, institutions can counter fraudsters by no longer accepting bank transfers. Plus, they can go a step further: remove their banking information from the web and verify that it’s not publicly available.
- Invest in multichannel awareness. Emails and websites don’t always cut it. Hold orientations for incoming students — especially international students. Partner with other organizations on campuses to help disseminate information on fraud. It’s not top of mind for young tertiary students, so direct contact is imperative and more effective.
When tech meets fraud: Challenges and solutions
AI has also given rise to new forms of fraud — including deepfake images and videos as well as voice scams — but it also offers a set of tools to mitigate scammers and help protect students. With anomaly detection, behavioral analysis, biometrics and real-time monitoring, there’s a new opportunity to prevent fraud before it starts. But its always important to act quickly.
Data plays an important role in these tech solutions. However, data collection is a balancing act; the more data you collect, the more vulnerable the data is to privacy infringement and fraud. Kevin Clark, Director of Compliance and Risk Investigations and Analysis at Convera, recommends institutions limit the amount of data they collect. Is the data you’re collecting private, and is it legitimate and necessary for security monitoring?
Derek de Weert, Senior Fraud Product Manager at Worldpay, emphasizes the importance of collecting quality data, noting that a security solution is only as good as its data.
For institutions, understanding their vulnerabilities and handpicking the necessary tools to address them is key to a successful security strategy regarding their payment services.
Tips for students to stop scams before they start
Today’s scammers are more creative than ever — but that doesn’t mean you have to play catch-up to avoid falling prey to student fraud.
Follow these 5 tips to maintain an edge over fraudsters and safeguard your tuition payments.
Act smart, not fast
Urgent. Pay right away. Immediate action is required. All of these are examples of a red flag. Criminals thrive on forcing you into quick decisions about money. And if it sounds too good to be true, it’s probably fake. Take a deep breath — legitimate payment operators will always set clear terms and timelines.
Leave social media for real friends and family
Social media might be part of your daily life at school or college today, but it’s not a place for education payments. Always pay using official platforms and services to avoid unnecessary risk.
Add an extra layer of security
Use two-factor authentication — such as a text code, e-mail, or authenticator apps — whenever possible. Adding an extra step to your login could be the difference between a safe payment and a compromised account.
Avoid unauthorized third-party networks and agents
Unauthorized third-party payments processors might promise simple transfers or exclusive deals on tuition, but they can also easily disguise scams. The only way to keep transactions safe is to use your university’s platform and services or official payments processor.
Stay up to date on the latest scams
From advanced phishing to modern spins on money laundering, each academic season brings a new set of tactics. Stay one step ahead and understand the latest trends with resources from education payment experts like Convera.
Want even more resources to help you stay one step ahead of fraud? Check out our full set of resources for institutions and students, featuring videos and in-depth guides to help safeguard against today’s top scams.
