Payment Fraud
Check Fraud Rings
Payment Card Fraud
Smart cards
Electronic Bill Payment and Person-to-Person Payments
Prepaid Card Fraud
scanner, printer,
and personal computer
Punishment and penalties are low
performs activities with the intention to defraud or take advantage of other people
misuse of credit or debit card information to make purchases without the cardholder’s authorization
Types
Unauthorized use of a lost or stolen payment card
Counterfeit cards
Skimming or shimming
Difficult to track after they have been purchased and
activated
Schemes
Attractive to fraudsters because they can be purchased at countless retailers
Use stolen payment cards to purchase prepaid debit or gift cards, thus quickly converting the illicit payment card funds into a legitimate cash equivalent.
schemes have prompted many retailers to insist on cash or debit
Plastic, credit-card-sized cards that are embedded with a microchip
smart cards cannot be easily
replicated or counterfeited; thus, they are generally more secure
Individuals can pay each other for goods or services through the person-to person
(P2P) system
Automatic payments can be set up via a bank or credit card website to pay bills
Examples :Sending invoices for the services not rendered,
Prevention and Detection of Electronic Funds Transfer Fraud
Verify by telephone or additional mailings
Separate the responsibility of bank employees
Send a welcome letter to the address on the application with the bank’s
return address
Always mail PINs separately from other information
Mobile Payments
Typically made through contactless technology, such as digital wallets or
applications—also known as in-app payments
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Accounts Takeover Fraud
Occurs when a fraudster surreptitiously takes control of a payment account
thieves obtain email addresses or other login
information and use various means to obtain passwords
hackers commonly create code that can run credentials obtained from
a data breach at one company to see if they are valid at another
Once the thief overtakes an account, communication methods and contact information are altered.