Payment fraud occurs when a person’s payment information gets stolen or used for unauthorized purchases or transactions. For any person who was a victim of payment fraud, it can be quite difficult to get their money back, as a lot of work goes into confirming whether or not a person was a victim of payment fraud. A business will have difficulty settling disputes related to payment fraud and will have to pay other fees such as investigation fees or chargeback fees. However, businesses can opt for many solutions and protective measures. You can easily protect your business from payments fraud with one of the fraud management solutions from Accertify.
Types of Payment Fraud
There are several types of payment fraud, and each of them can be prevented if some measures are taken. However, it is important to know that it is impossible to completely eliminate payment fraud as there can always be some fault in the system. The main three types of payment frauds to look out for include:
- Identity theft: this type of payment fraud occurs when someone illegally does transactions under the disguise of someone else’s identity. Instead of creating new identities, fraudsters just steal someone else’s identity, along with their bank information, and then they use this information to make false transactions and purchases. This type of payment fraud is the most common type.
- Clean fraud: this type of payment fraud occurs when fraudsters analyze business detection systems and use the stolen information from valid payments to make false transactions of their own. This type of payment fraud is the hardest to figure out.
- Friendly fraud: this type of payment fraud occurs when customers initiate a false chargeback to get refunds for their product or service while keeping said product or service with themselves. This is one of the most common types of payment fraud amongst people who did not have their own payment information stolen.
What Steps Can Be Taken to Reduce the Chances of Payment Fraud?
There are many steps that individuals, as well as businesses, can take in order to reduce payment fraud. Some of them include:
- Monitor each transition carefully: make sure you have the shipping address, date, amount, and IP address of the things you purchase safely with you. This helps you keep track of the transactions that occur on your card.
- Reduce access to confidential information: you reduce the chances of identity fraud by restricting the amount of information you give organizations. Only provide confidential information to trusted businesses, governments, or employers.
- Avoid taking down transactions on paper: keeping all the important information recorded on paper can make you susceptible to payment fraud as this information can be easily stolen.
Payment fraud has become a common occurrence in today’s day and age, especially due to the prevalence of online payment systems. While it may be getting harder to locate how payment frauds are occurring, the system is catching up to these fraudsters, and many new ways have started to develop to fight this battle against illegal practices.