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Categories of Fraud- Featured ImageFE5163grYR$#@$

Categories of Fraud (Infographic)

by LoginID

Fraud happens when a criminal steals money, assets, or personal information from their victim in the form of lost or stolen merchandise, false requests for return, refund, or bounced checks, and unauthorized or fraudulent transactions. Fraudulent individuals also have different ways to scam people, such include: 

Phishing is a social engineering technique that bad actors use to steal user data such as credit card information and login credentials. They pretend to be an individual from a trusted entity and convince their victims to open a fraudulent instant message, text message, and email or disclose sensitive information such as OTP (one-time PIN). 

Pagejacking is the fraud type wherein criminals replicate the original website into a new domain and illicitly redirect web traffic from the original site to the copied web page. 

Clean fraud is where a fraudulent transaction appears to be legitimate, which means it is less likely to be flagged or shown on a list of fraud accounts. In this fraud type, cybercriminals trick account holders into making a purchase from an illegitimate website to make the scam appear genuine. In addition, since customers are buying on a fake website, fraudsters can intercept transactions between the transaction parties – they can then use the information they have gathered to make fraudulent purchases on an actual website. 

Friendly fraud happens when customers falsely initiate chargebacks. Fraudulent individuals dispute a product or service on their transaction report and request a refund. In this type of fraud, criminals do not only get their money back, but they also get to keep the service or product they have ‘purchased.’ 

Fraud has long been a problem among consumers and businesses, particularly those in the financial and e-commerce industries. Along with the evolving trends and practices in these industries is the increasing creativity of hackers with their techniques to circumvent business networks and steal funds and sensitive information. 

For business organizations to reduce their chances of falling victim to fraud, they need to replace their inefficient identity proofing protocols with modern online identity verification procedures to further strengthen their cybersecurity systems. They can invest in FIDO 2.0-compliant authentication solutions for stronger authentication. 

FIDO2 leverages biometric identity verification – this means that users will use their biometric (facial or fingerprint) as a private key that they can use to securely authenticate into their accounts and complete transactions. 

To know more about what fraud is, how it happens, the different categories of fraud, and how to reduce fraud risks, read this infographic from LoginID

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