First party fraud
There are many potential crimes that online businesses have to guard against. Identity theft, account takeover, age verification and money laundering are always a threat, but fraud is undeniably the most common crime for businesses to deal with.
Everyone has experienced buyer’s remorse at some point in their lives. A frivolous purchase, an overly expensive gift, or a bet that you regret. It’s easy to spend more than you intended and want to take it back.
Most of us accept the reality of our situation and tighten our belts until the next payday. However, there are a few who would rather claim that they had been the victims of a crime with the rationalisation that no-one is really being hurt. Unfortunately, that’s not true. If a customer falsely claims fraud, then it’s your business that’s losing out.
Payment card referencing using Card Check can act as a shield for your business in these situations. By requiring the customer to show their physical card in addition to other KYC procedures, you’re able to prove without a doubt if they made the disputed purchase.
It’s worth recognising that such instances of attempted first party fraud are often made in panic or due to forgetfulness rather than malice, so while perpetrators are motivated, they’re more likely to back down when challenged compared to third-party fraudsters.
Thanks to HooYu’s payment card referencing capability it’s easy to point to the KYC journey activity log and determine whether or not it was legitimate activity on the customer’s account thanks to the payment card referencing check made at pay out.
Third party fraud
Account takeover, in the form of third party fraud aka application fraud, is far more common an occurrence than first party fraud. And far more difficult to detect.
Third party fraud is different from first party fraud as the fraudster is hiding their true identity. In this instance, a criminal has illicitly obtained the login details or similar to access another person’s account and is likely seeking ways to drain that account of value.
Fraud of this type is on the rise according to separate reports from Deloitte and EY, making it an area of significant concern for all businesses. Part of this is due to the COVID-19 pandemic with the fraud rate having risen by 33% in the UK alone according to Experian.
By the time that a criminal has taken over an account and is at the pay out stage of your customer journey they have already created a convincing semblance of the legitimate customer they’re impersonating.
This type of fraud often dominates headlines in the mainstream press. It is a common fear amongst your customer base and stoked by concerns that they will lose considerable amounts of money to fraudsters. Using Card Check as a barrier to pay outs is an easy way to flag to your customers that you take their entire customer journey seriously and will protect their money as it enters and leaves your business.
HooYu’s Card Check also means you can prevent your business from funding the fraudsters and actively assists in preventing financial crime. As part of the KYC customer journey Card Check allows you to make sure that no money leaves the business except to go into the correct customer account.
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