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Transaction Trends Home Trends Mar08 Risk in Review: Is Your Risk Monitoring System Risky?
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| Risk in Review: Is Your Risk Monitoring System Risky? |
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One of the older schemes in merchant fraud is issuing credits/refunds with no offsetting sales. Over the years, the scheme has changed as the industry catches up and updates the monitoring systems. In the earliest version of the fraud in question, perpetrators would just issue refunds with no offsetting sales to credit cards. The industry learned to look for negative batches. The fraudsters then began issuing credits with no offsetting sales and would then run a charge for the exact same dollar amount on a stolen credit card. This would make the batch zero or slightly positive. The industry caught up by making the risk monitoring systems look at all credits and reconcile them to offsetting sales on the same card numbers. Along the way, the fraudsters learned that if you run the returns on check cards, they would have access to almost instant cash instead of having to wait around for the issuers to send checks out. All of the earlier frauds were performed using the credit card networks. Download the full PDF |
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