People mistakenly commit fraud, but not all fraud is the same. There are two types of fraud: friendly fraud and true fraud. Both cause problems for businesses; however, true fraud is the greatest concern. Luckily, it can be easier to catch when the right tools are used to do so. We’ll take a look at both types of fraud and what you can do about protecting your company from fraud.
True Fraud
True fraud refers to identity theft and other types of crimes. This happens when someone uses someone else’s social security number, credit card, name, address and other identifying information to create an account or to purchase something. True fraud can cost businesses millions of dollars every year, and it happens enough that any business can go under if they are not careful.
True fraud occurs more frequently than you know. Because of data leaks through a variety of well-known companies like Equifax, people wanting to commit fraud have easy access to others’ information. If you need more details about various types of fraud, visit this website.
Friendly Fraud
Friendly fraud isn’t exactly “friendly.” It’s still a crime. Friendly fraud happens when someone wrongly requests a refund through a chargeback. So, a person opens a legitimate account using their identity and buys something with their credit card. Then, that same person tries to get the money back on the purchase they made while keeping what they bought. Friendly fraud is harder to prevent than true fraud, and you should focus on preventing true fraud.
What You Can Do About True Fraud
To prevent true fraud, the most important thing you can do is verify your users. It’s not only required that you do so, it also helps to keep fraudsters out. Be sure to allow legitimate users the ability to report suspicious information. Also, monitor your users’ activity in real time. Prevention is your best line of defense to prevent fraud.
Read a similar article about cryptocurrency compliance here at this page.
