1 anti-fraud committee fraud awareness for merchants
TRANSCRIPT
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Anti-Fraud CommitteeFraud Awareness For Merchants
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Educate as to how certain fraud typologies can affect you, the merchant
To be more aware of fraud and fraud incidents in the workplace and business environment
To provide tips on how to prevent and/or reduce the risk of you and your business becoming a victim of fraud
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“ A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.”
(Source - Blackstone’s Legal Dictionary)
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A material false statement, knowledge that the
statement was false when uttered, reliance on the false
statement by the victim to act on it and damage as a result
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Fraud Internal and/or External
The Internal Elements of Fraud
What happens at your place of business
The External Elements of Fraud
Is your place of business a target for Organised Crime (fraud)
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Definition of Internal Fraud (Association
of Certified Fraud Examiners - ACFE)
Internal Fraud a.k.a. – occupational fraud can be defined as:
“the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets.” Simply stated, this type of fraud occurs when an employee, manager, or executive commits fraud against his or her employer.
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Why Does Fraud Occur
The best and most widely accepted model for explaining why people commit fraud is the fraud triangle. This is a model developed by Dr. Donald Cressey, a criminologist whose research focused on embezzlers—people he called “trust violators.”
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Fraud Offences Include Fraudulent Conversion Falsification of Account Obtaining by False Pretence Embezzlement Uttering Forged Documents Dishonoured Cheques
2012 2013 2014
FRAUD OFFENCES 2012 - 2014
Over 2,000
Under 2,000
219
44
122
12
307
33
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What is Fraud
You may not be able to prevent yourself from being a “Target” to fraud…
…but you do not have to be a “Victim”
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Risk of Fraud - Payment Channels
Credit Card
Managers Cheque
Online (wire transfers)
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Section 1
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What is Skimming
“The surreptitious act of copying the encoded card information off the magnetic strip of either a credit or debit card with the intent to create a cloned card to facilitate fraudulent transactions on the legitimate account”
(Source - BATT)
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At the Cashier
Hand held skimming device Cards are swiped unsuspecting of the customer
using skimming device
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Stolen Cards Cards are taken at the point of purchase Cards used without the consent of the
card/account holder (domestic situation)
Lost Cards Lost cards are used to assist with stolen card
typology
Report lost/stolen cards to your bankers immediately
Be aware of the bank’s hotline numbers and reporting options for your bankers
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Rogue Employee – using skimming device (reputational risk)
Bust Out Merchant Fraud – colluding with the fraudster in using stolen/fraudulent cards (prosecution) – gets a % of the settlement (operating a/c)
Proof in the receipt – as evidence of sale (proper storage)
Ecommerce merchants – Data security
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Be wary of suspicious card holder behaviour More than one card to effect one purchase Choosing goods randomly/ shopping in groups Purchasing multiple high ticket items Multiple foreign Cards in his/her possession
Compare the signature on the receipt, by holding on to the card, against the signature on the reverse of the card
Ensure the gender of the card corresponds to the customer
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Tips To Reduce risk (internal)
Monitor payment area/workstation for skimmers/lost cards
Educate/train your employees
Examine your terminals (portable)
Segregation of Duty (business cards/ reconcile account)
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Managers Cheques Call your bank to verify cheques drawn on your
bank Do not release goods/services before verifying
the authenticity of the cheque Exercise caution when dealing with ‘new clients’ Ask for your account relationship manager to
verify the cheque Look for the security features listed on the face of
the cheque – these features are listed next the padlock
Look for the bleed through feature on the MICR line
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New Facts About Cyber Threats
In 2008, a cyber attack effectively crippled the entire nation of Estonia for a few days.
In 2009, the US president called cyber threats one of the greatest challenges to his country’s economy and national security.
Q1 2013, McAfee detected 14 million new pieces of malware.
In 2013 there are 82,000 new malware variants discovered per day.
In 2015, a survey found that the greatest threat to businesses are cyber-related threats.
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Banking Related Wire fraud Threats
Phishing A fake email pretending to be from a bank or
other organization claiming to need your account details or other personal information
Malware (banking malware) Malicious Software (specifically designed for
financial transactions)
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Hard Copy Instructions via Letter Heads Sent to the bank via courier Subsequent calls to support instructions
Internet – Cyber Crime Sending instructions to your banker via email to
process wire Intercepting emails with payment arrangements
and redirecting wire to another account, at another bank, in another jurisdiction.
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Do not send private or financial information via an unsecure email address
Do not respond to unsolicited emails
Do not access any online facility via an email◦ “Don’t be the weak link…Don’t click on the hyperlink”
(Source - BATT Inter Bank Fraud Committee)
Reconcile your account/s on a regular basis.
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Basic Online Security Tips
Use (and protect) strong PINS and passwords (use phrases e.g “Lara is the best”; “election is tomorrow” etc.)
Keep computers updated (No Windows XP!) Do annual security awareness training (include
social engineering training) Get experts to install and maintain firewalls &
anti-malware Do online banking from secure computers only Be careful what you put online (website, social
media) Use email safely
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Questions