Business & Finance

Payment Fraud And How To Limit It

Payment Fraud And How To Limit It

In any sphere of human activity, which is directly or indirectly connected with finances, sooner or later there are those who seek to fraudulently obtain these very finances. The sphere of bank payments is no exception. In this article, we’ll analyze the most popular payment fraud schemes and methods of combating them.

The most popular types of payment fraud

Technological progress moves inexorably forward, but with it, the fantasy of swindlers also develops. In order not to fall for their tricks, you should be vigilant and watch for new types of fraud. Because of them, clients lose their money, and companies lose clients and their reputations. Let’s take a brief look at the most popular fraud schemes.


Scammers test cards for activity. This is a common fraudulent practice that is usually practiced before selling card details on the darknet. If the card is tested and active, it can be sold for much more.

To verify that the card is active, the attacker tries to register it for a service. He chooses among those that are provided for free and requires the entry of card data. After that, a test transaction is conducted for a zero amount.

To combat this type of fraud, issuing companies need to take the following measures:

  • use analytical mechanisms capable of detecting fraudulent card payment schemes automatically;
  • monitor cardholders’ behavior and frequency of transactions and counteract other fraud scenarios;
  • control the time intervals between transactions by monitoring the operation of bots and card testing scripts. They are easy to detect because their work involves multiple transactions in a short time frame.

Buy-Back Scams

This type of fraud involves the purchase of an item over the Internet with the subsequent initiation of a refund. In this case, the goods are not returned to the seller.

In order to identify and mark serial fraudsters, it is necessary to use the so-called “black lists”. This will allow you to avoid serving undesirable customers in the future and avoid incurring new charges.

Account theft

Attackers take over someone else’s account, using phishing and identity theft through fake websites that look like the real site of a well-known company. The customer goes to such a site and leaves information about himself, which is used in the future for attacks on himself. Data can also be captured on well-known portals during a hacker attack; information with stored payment details is especially interesting for fraudsters.

To break a fraudulent scheme, you need to use a more flexible risk management system. Vendors should provide more information. The best marker of a seller’s reliability can be considered a sufficiently long date of registration of his account. Customer profiling should also be introduced in order to distinguish real users from scammers.


This is an attack on a client from three sides at once. The unsuspecting customer pays money for an item on a fake site, the scammers intercept his card information, arrange delivery of the item for the customer, and demand a chargeback from the seller.

To break this scheme, you should use a system of trusted lists and block questionable customers who may be involved in triangulation.

Chargeback Service

Many ads can be found on the Internet that certain “experts” provide a refund service. The principle behind their work is that they pretend to be a buyer, ostensibly claim to be a so-called fraud in their own name, and, using the loopholes they know, try to return lost or damaged goods. This type of fraud is very common and difficult to detect.

A salesperson needs to be able to analyze a customer’s previous orders in order to detect fraudsters in time. When customers use unique personalized cards, they will never be mistakenly detected as fraudsters due to the unique attributes of such payment tools. The issuance of such cards is possible through the Wallester platform thanks to WhiteLabel technology. In addition to the fact that such cards uniquely identify the customer and increase the recognition of the issuing company, white-label card processing by Wallester is much faster and of higher quality.

Gift Card Fraud

The problem with gift cards is that they are quite difficult to control. They are less strictly regulated than credit and debit cards. Scammers use the data stolen from them to buy goods and services online, and then return the goods and request a refund instead of a gift card.

To prevent this type of fraud, you should add more information about the product to your shopping cart or ask for more information about the customer. Also, using non-standard risk controls that detect suspicious transactions will help identify gift card scammers.

Despite the fact that scammers are constantly inventing new schemes for taking other people’s money, it’s nice to know that the fight against them hasn’t stopped for a minute. In order not to fall victim to fraudulent actions with payment cards you should follow the information about new fraud schemes and methods of fighting them.


Hi. I'm Mursaleen Siddique, The guy behind I'd rather call myself a struggling Blogger. I love Blogging with WordPress, Covering Tech, General Topics, Graphic & Web Design Inspiration., Feel free to get in touch via mentioned social media platform or E-mail me at hello[at]
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