Payment with Dispute Resolution: A Protocol for Reimbursing Frauds Victims

Abstract

An "Authorised Push Payment"(APP) fraud refers to a case where fraudsters deceive a victim to make payments to bank accounts controlled by them. The total amount of money stolen via APP frauds is swiftly growing. Although regulators have provided guidelines to improve victims' protection, the guidelines are vague, the implementation is lacking in transparency, and the victims are not receiving sufficient protection. To facilitate victims' reimbursement, in this work, we propose a protocol called "Payment with Dispute Resolution"(PwDR) and formally define it. The protocol lets an honest victim prove its innocence to a third-party dispute resolver while preserving the protocol participants' privacy. It makes black-box use of a standard online banking system. We implement its most computationally-intensive subroutine and analyse its runtime. We also evaluate its asymptotic cost. Our evaluation indicates that the protocol is efficient. It imposes only O(1) overheads to the customer and bank. Moreover, it takes a dispute resolver only 0.09 milliseconds to settle a dispute between the two parties.