Pix is Brazilians' favorite payment method. And it's also popular among scammers applying fraudulent practices. According to financial institution Asaas, 71% of fraudulent transactions were made with Pix.
The Central Bank Of Brazil and the Brazilian Federation Of Banks (in Portuguese, “Federação Brasileira de Bancos”, or Febraban) have announced that the Special Refund Mechanism (in Portuguese, “Mecanismo Especial de Devolução”, or MED), a feature developed to facilitate Pix refunds in fraud cases, will undergo new changes.
With the MED, fraud victims can file a complaint with their financial institution up to 80 days after making the Pix transfer. Upon notification, the funds are blocked in the recipient’s account for review. If the fraud is confirmed, the funds are returned to the victim — but this depends on the availability of funds in the fraudster’s account.
In the current MED model, the infraction notification allows blocking only in the first account — meaning the first layer — that received the amount. Now, Febraban proposes to block funds in other layers of triangulation.
The new project, named MED 2.0, should be developed throughout the second half of 2024 and implemented by the end of 2025, according to Febraban.
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Source: https://www.bcb.gov.br/detalhenoticia/744/noticia
Everybody Loves Pix — Including Scammers
Pix is Brazilians’ favorite payment method. And it’s also popular among scammers applying fraudulent practices. According to financial institution Asaas, 71% of fraudulent transactions were made with Pix.
To tackle this issue, the refund mechanism was developed in 2021 and registered 1.5M refund requests in 2022. In 2023, the number spiked to 2.5M. From January to May 2024, the number of requests has already reached 1.6M. However, the Central Bank Of Brazil says only 9% of the requests were refunded in 2023.
According to a study carried out by Silverguard, 89% of refund requests via MED are denied due to insufficient funds or the closure of the account that received the money. This is because, most of the time, the fraudster quickly transfers the money to other accounts or withdraws the funds, making it impossible to refund the amount.
The goal with MED 2.0, according to Febraban, is “to reduce the incidence of different types of fraud and scams using Pix”.
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