Why do fraudsters steal? To make money. So when fraudsters steal from a merchant, it is their intent to make money. They may do this by directly reselling the goods or services they got from a merchant or by tricking a merchant into refunding cash or other monetary devices (gift cards) for goods or services that were theirs to begin with.
Fraudsters are going to make themselves look and seem like they are someone else, and they are good at it!
In this post, we are going to dive deeper into understanding the fraudster. We are going to look at the history of fraudulent activity, the types of schemes they use, and ways to describe specific fraudster personalities. To begin our discussion, let us segment fraudulent activity into four categories:
1. Identity theft
Identity Theft (Third Party) Large purchases; bust-out activity (maxing out of cards in short time periods); many purchases; perfect identities; address, phone and credit card data look
2. Social engineering
Attempting to find out information by asking questions, or to change information through social interaction. Hijack orders by changing shipping information or changing billing data on an existing credit card account.
3. Convenience (ease of use)
Testing cards to see if they work by making small purchases at safe locations like gas stations, electronic download services, or fee-for-service locations.
4. Internal fraud
Organized fraudulent activity by person or persons working in a company, sharing information on how to perpetrate fraud to conducting actual theft.
These four categories give us a generic way to describe a fraudster’s trick or scam by describing the activities and characteristics of the order the fraudster is presenting. This is just the beginning; as you learn more, you will get more specific ideas on schemes and fraudster personalities. The main reason I mention these four categories is to give you a context for describing fraudsters so you can start to tie historical fraud knowledge to types of schemes and personalities.