Payment Fraud Prevention

𝗖𝗵𝗮𝗿𝗴𝗲𝗯𝗮𝗰𝗸𝘀, 𝗥𝗲𝗳𝘂𝗻𝗱𝘀, 𝗮𝗻𝗱 𝗥𝗲𝘃𝗲𝗿𝘀𝗮𝗹𝘀 Merchants and folks in payments often use these terms interchangeably when they’re actually very different. Confusing them can cost time, money, and customer trust Let’s break it down 👇 𝗪𝗵𝗮𝘁 𝗧𝗵𝗲𝘆 𝗔𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗠𝗲𝗮𝗻 𝗥𝗲𝗳𝘂𝗻𝗱 → A merchant-initiated return of funds to the customer. The sale is reversed at the merchant’s discretion (product return, service issue, goodwill) ▪️Customer asks merchant directly ▪️Handled via acquirer → issuer → customer ▪️Generally cheaper and faster than a chargeback 𝗖𝗵𝗮𝗿𝗴𝗲𝗯𝗮𝗰𝗸 → A cardholder disputes a transaction with their bank. The issuer pulls funds from the merchant, pending investigation ▪️Customer bypasses merchant ▪️Higher fees + penalties for merchant ▪️Impacts chargeback ratio (risk of being flagged by Visa/Mastercard) 𝗥𝗲𝘃𝗲𝗿𝘀𝗮𝗹 → A transaction is cancelled before settlement ▪️Merchant or issuer prevents funds from being finalized ▪️Typically happens due to fraud detection or technical error ▪️Least damaging for both merchant and customer 𝗧𝗵𝗲 𝗠𝗲𝗿𝗰𝗵𝗮𝗻𝘁 𝗜𝗺𝗽𝗮𝗰𝘁 → Refunds are under your control — but too many can signal product/service issues → Chargebacks are expensive — fees, lost goods, higher risk categorization → Reversals are cleaner — but usually out of merchant control, triggered by banks or fraud systems The danger is confusing which is which. If your ops team treats chargebacks like refunds, you’ll miss the dispute deadlines and lose every case by default 𝗥𝗲𝗮𝗹-𝗪𝗼𝗿𝗹𝗱 𝗘𝘅𝗮𝗺𝗽𝗹𝗲 You run a subscription service: 1️⃣ Customer forgets they subscribed → files a dispute → becomes a chargeback (with fees + ratio hit) 2️⃣ If they had come to you first, you could have issued a refund (avoiding the chargeback entirely) 3️⃣ If your fraud system flagged their transaction instantly, it could have been a reversal (never impacting revenue at all) 𝗦𝗼 𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻? ▪️Educate support teams → ensure they understand the difference ▪️Encourage refunds before disputes — better CX + fewer chargebacks ▪️Invest in fraud prevention → more reversals, fewer downstream problems ▪️Track ratios closely → Visa and Mastercard monitor merchant chargeback levels 𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁 Refunds, chargebacks, and reversals may sound similar, but the differences matter. For merchants, understanding them isn’t just semantics — it’s the difference between managing risk and being blindsided by fees, penalties, and damaged reputation. The clearer your teams are, the stronger your payments strategy will be Source: Pagos, Visa, Chargebacks911 🔔 Follow Jason Heister for daily #Fintech and #Payments guides, technical breakdowns, and industry insights

Financial crime compliance (FCC) remains a critical priority for financial institutions, requiring robust controls, governance, and regulatory alignment. The Financial Crime Guide (FCG) 2025, published by the UK Financial Conduct Authority (FCA), offers a comprehensive framework for firms to strengthen their financial crime risk management, covering money laundering, fraud, bribery, sanctions, insider trading, and market manipulation. Key Takeaways ✅ Governance and Senior Management Responsibility • Firms must establish a clear governance structure where senior management actively oversees financial crime risks. • Boards and risk committees should regularly review financial crime reports and escalate key concerns. • Financial crime risk must be integrated into corporate risk management, with dedicated MLROs ensuring compliance. ✅ Risk-Based Approach & Compliance Framework • Firms must continuously assess their exposure to financial crime risks across products, services, customers, and jurisdictions. • A proactive risk assessment model should be in place, using data-driven insights and regulatory intelligence. • EDD is required for high-risk entities, such as PEPs and businesses in high-risk sectors. ✅ Money Laundering & Terrorist Financing Controls • Real-time transaction monitoring must detect unusual patterns, particularly in cross-border payments and digital assets. • Strong KYC and CDD processes are required to UBO. • Firms should leverage AI-driven AML analytics to track complex laundering networks and illicit flows. ✅ Fraud Prevention & Data Security • Firms must strengthen internal controls to detect fraudulent transactions and mitigate risks from synthetic identity fraud and cybercrime. • Cybersecurity measures should align with the NCSC, GDPR, and UK ICO guidelines to prevent data breaches and financial fraud. • A zero-trust security model is encouraged, with continuous monitoring of internal and external fraud risks. ✅ Sanctions, Asset Freezes & Proliferation Financing • With evolving geopolitical risks, financial institutions must align their sanction screening tools with FATF, OFSI, and EU sanction lists. • Compliance teams must detect and prevent trade-based money laundering (TBML) and ensure crypto asset compliance against sanctions circumvention tactics. • Third-country correspondent banking relationships must undergo stringent due diligence and ongoing risk monitoring. Strategic Actions for Compliance Leaders 🔹 Automate financial crime controls—AI-driven compliance tools improve fraud detection, sanctions screening, and transaction monitoring. 🔹 Enhance regulatory engagement—proactive collaboration with FCA, FATF, and JMLSG ensures alignment with evolving compliance expectations. 🔹 Integrate cybersecurity and financial crime risk strategies—given the rise in cyber-enabled financial crime, firms must merge cyber risk governance with FCC protocols. #FinancialCrime #Compliance #AML #Sanctions #CyberRisk

Candidate fraud is rampant. Some recent examples I've seen: - fake candidates using the resume/LinkedIn of real people - people using AI filters in interviews - people fabricating experience on their resume - different people showing up at different stages of interviews Companies are already doing many of the following to catch fraud: - checking IP addresses for a match between the stated location and app location - checking for VPN usage since this could indicate someone is attempting to hide their location - checking for unusual behaviors like an app that should take 15 minutes being submitted in 30 seconds as an example indicating an AI-generated app vs human-generated one. - checking the age of your email address - checking the account behind your phone number - reviewing your LinkedIn account to see how it matches the content of your resume - contacting you via LinkedIn to ensure you are the person who applied - checking your previous applications to the company for consistency across experiences - recording interviews or taking pictures at each stage to verify the same person is showing up - verifying the identity and IP address of your references - holding on site interviews, even for remote jobs - running more thorough background checks and employment verifications Most companies recognize that some of the above "flags" will be present in legitimate candidates. For example, VPN use is quite common for many in tech, lots of people use phones that may show a parent or partner's name on the account, you might be applying while on vacation, etc. But if multiple flags are present, they may decide the risk is too great and simply move on the next candidate. So if I were applying right now, I would: 1. Be aware of the above when applying. 2. Put a picture on your profile (this may minimize the chances of someone using your name/profile to apply for jobs and also helps employers verify you are in fact the person on the interview). 3. Consider the content on your public social media profiles - companies will be checking more and more to mitigate their risks, and that means they'll have more line of sight into you how you think about the workplace, your expertise, etc. Make sure this is additive, rather than something that raises flags. Finally, I'll note that the common responses I see to the above are things like, "well employers made this an issue by making it so hard to get a job". And while I could have a conversation about why this is illogical, it's honestly just not even worth a discussion. Because no company is sitting there right now thinking, "gosh, people are struggling to navigate this job market, let's just open ourselves up to risk." They're just not. Their priority is to minimize risks. Hiring a fraudulent candidate with bad intentions could put their entire company at risk and they aren't going to do that. So if you're navigating a job search - especially for remote tech jobs, keep this in mind, and adjust accordingly.

🚨 AI + Font Forensics = ₹68 Lakh Tax Fraud Busted in Hyderabad 🚨 The Income Tax Department in Hyderabad recently used AI-powered font forensics to uncover a Long-Term Capital Gains (LTCG) fraud worth ₹68.7 lakh. A taxpayer claimed improvement costs from a bill dated 2002, but AI tools flagged the use of the Calibri font—which was only released in 2006–07. This inconsistency exposed the document as forged, prompting a revised ITR and additional taxes paid . 🔍 Why This Matters for Auditors & Risk Professionals 1. Innovative Forensics AI isn't just for big data and predictive insights—it’s now a frontline tool in document authenticity verification. Font analysis is a low-cost, high-impact method. 2. Red-flag Awareness It’s not enough to verify the content—verify the context. Details like font age, metadata timestamps, or even document origin can reveal fraud. 3. Regulatory Relevance Tax authorities are stepping up forensic capabilities. Expect similar methods to be applied in other regulatory areas—GST, money laundering, financial filings. 4.Upgrade Your Toolkit Incorporate similar forensic checks—font, metadata, version histories—into due diligence, vendor audits, expense claim reviews, and whistleblower investigations. ✅ Action Steps ✅ Add font & metadata analysis to your internal audit and investigation playbooks. ✅ Train teams to look beyond signatures—validate document authenticity at a granular level. ✅ Evaluate simple AI tools that can detect anomalies in fonts or document history. ✅ Share this knowledge in audit committees, risk forums, and compliance training. This case is another reminder: fraudsters adapt, but so must we. In a world where even fonts can betray deception, staying ahead requires curiosity, precision, and technology-backed scrutiny. What forensic techniques are you using to catch today’s more subtle frauds? #Forensics #Audit #RiskManagement #AI #InternalAudit #Compliance

Last month, India’s biggest crypto exchange CoinDCX lost ₹368–378 crore. Not because of a customer hack. But because an internal wallet got compromised. Here’s how it played out 👇 → Attacker hijacked a liquidity wallet → Bridged funds (Solana ↔ Ethereum) → Laundered via Tornado Cash Customer wallets? ✅ Safe. But the breach? ❌ Server-side, deep inside their own infra. Most teams think “cold storage = safe.” Reality check: internal wallets are the real blind spot. Here’s what 99% of teams don’t do when it comes to high-risk wallets,  automation accounts, and liquidity ops. So here’s a 6-point Internal Wallet Risk Audit you can run this week: 𝟭. 𝗪𝗮𝗹𝗹𝗲𝘁 𝗥𝗼𝗹𝗲 𝗠𝗮𝗽𝗽𝗶𝗻𝗴 List every wallet → check what it should do vs what it can do. ⚠️ Red flag: liquidity wallet can move treasury funds. 𝟮. 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗟𝗶𝗺𝗶𝘁𝘀 + 𝗩𝗲𝗹𝗼𝗰𝗶𝘁𝘆 Can the wallet push $10M at once? Or 10x in 2 min? ⚠️ Red flag: no daily caps or auto-delays. 𝟯. 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 & 𝗦𝗶𝗴𝗻𝗶𝗻𝗴 𝗪𝗼𝗿𝗸𝗳𝗹𝗼𝘄𝘀 Who signs off on big moves? Forced multi-sigs? JIT approvals? ⚠️ Red flag: backend automation with always-on keys. 𝟰. 𝗕𝗿𝗶𝗱𝗴𝗲 𝗕𝗲𝗵𝗮𝘃𝗶𝗼𝗿 𝗪𝗮𝘁𝗰𝗵 Monitor transfers across chains. Auto-pause weird routes/off-hours. ⚠️ Red flag: first-time bridge + big amount + midnight = no alert. 𝟱. 𝗞𝗲𝘆 𝗥𝗼𝘁𝗮𝘁𝗶𝗼𝗻 𝗗𝗶𝘀𝗰𝗶𝗽𝗹𝗶𝗻𝗲 How often do you rotate keys? Retire old ones? ⚠️ Red flag: stale keys from 2022 still active. 𝟲. 𝗥𝗲𝗱 𝗧𝗲𝗮𝗺𝗶𝗻𝗴 ‘𝗥𝗼𝗴𝘂𝗲 𝗪𝗮𝗹𝗹𝗲𝘁𝘀’ When did you last simulate a compromised wallet? ⚠️ Red flag: confident → but never tested. Know friends or colleagues trading crypto?  ♻️ Re-share this with them, they should know where the real risks are. This wasn’t a crypto-specific failure. It was a visibility, privilege, and control failure. What are your thoughts on the CoinDCX breach? #CyberSecurity #CryptoSecurity #BlockchainSecurity #CryptoNews #DataBreach #HackPrevention #Web3Security #CloudSecurity #InfoSec #CryptoHack #CoinDCX #SecurityAwareness #FinTech #RiskManagement #SecurityTips #HackingNews

Chargebacks 101: the part of payments nobody explains When you start accepting payments… Nobody warns you about this. But it can quietly destroy your margins. 🤓 What is a chargeback? A chargeback is a forced refund initiated by the customer’s bank. Not a normal refund. 👉 It involves: the customer the issuing bank the card network (Visa / Mastercard) the acquiring bank And you… the merchant. And... (the worst part), you usually find out when the money is already gone. ⚙️ How it works (when used properly) Legitimate case: Customer spots an issue (fraud, product not received, wrong charge) Contacts their bank The bank initiates a chargeback A dispute process starts The merchant can respond (representment) 👉 If the merchant proves the transaction was valid → funds can be recovered 👉 If not → money is lost + fees applied ✔️ It’s a consumer protection mechanism ✔️ It builds trust in the payments ecosystem 🚨 How it’s actually used (in many cases) Here’s the uncomfortable truth: 👺 “Friendly fraud” The customer: received the product ✔️ used the service ✔️ and still disputes the transaction ❌ Typical reasons: “I don’t recognize this charge” Avoiding refund processes Pure abuse of the system 💥 Result: Merchants lose revenue… even when everything was done right. 📊 The data you should not ignore 60%–80% of chargebacks are friendly fraud For every €1 disputed, merchants lose €2–€3 in real cost (product + logistics + fees + operations) Critical thresholds: ~0.9% → early warning zone >1% → monitoring programs (Visa/Mastercard) >3% → potential account termination Resolution time: 👉 30–90 days And the biggest problem: 👉 most merchants don’t fight them 🧠 The biggest misconception Chargebacks are not “part of doing business”. They are a core KPI. 🛠️ How to actually reduce them It’s not just fraud prevention. It’s experience + control: ✔️ Clear product/service descriptions ✔️ Recognizable billing descriptors ✔️ Strong customer support ✔️ Smart use of 3DS (not everywhere) ✔️ Tokenization & recurring payment control ✔️ Proper evidence management 👉 And above all: measure everything. You can optimize your fees. You can improve your checkout. But if you don’t control your chargebacks… you’re losing money without realizing it. 🚀 What’s next This is just the beginning. Chargebacks behave very differently depending on the industry: ✈️ Travel 🚗 Mobility / Car rental 🛍️ eCommerce 🎟️ Ticketing I’ll break them down by vertical in upcoming posts. If you made it this far… 💬 Do you know your current chargeback ratio? 📊 And your real cost per dispute? #Payments #Fintech #Chargebacks

Your “star employee” might be presenting to the board in the morning… …and cloning your entire trading platform at night. That’s not a movie plot. That’s a real investigation my team and I handled for a fintech where: -Source code and trading algorithms were stolen -Customer data walked out the door -A “new competitor” launched with a suspiciously similar platform And it was all done by their own employees In my new video, I break down how we cracked the case using: -Digital forensics (logs, devices, repositories, VPN trails) -AI-based pattern and code similarity analysis -Forensic interviews that shift from “I don’t remember” to “Let me explain…” -Tight coordination with General Counsel and external law firms to make the case court-ready from Day 1. If you’re a GC, CXO, or Board member in a data-heavy business (fintech, SaaS, trading, platforms) and you rely on proprietary IP, this is exactly the scenario you don’t want to face unprepared. 🎥 Watch the full breakdown in the video. Your IP is already under attack. The only question is whether you’ll find out in time, and whether you’ll be able to prove it. DM or Comment "Insider" to plan your protection against rogue insiders. #forensics #cybersecurity #fintech #insiderthreat #digitalforensics #legal #generalcounsel #trading #AI #investigations #dataprotection

💥FinCrime Mythbusters💥Myth#12〰️Red Flags 🚩🚩 🚩 ❌ Myth: Red flags in SARs are clear and always mean criminal behavior. ✔️ Reality: Red flags are indicators, not certainties. They point to unusual activity, but only context and judgement can turn a flag into a strong suspicion. ⭕ In practice, a red flag on its own is often ambiguous 📌 Multiple small deposits, it could be money laundering, or someone running a side business or a customer saving for a holiday 📌 Rapid cross border payments might suggest layering, or a customer supporting family abroad 📌 Crypto is high-risk, or legitimate investment 📌 Frequent ATM withdrawals, it could be structuring or someone who simply prefers cash 📌 Multiple small inbound credits, then one large outbound, it could be a mule activity or an online seller consolidating sales. 📌 Round-number transfers, it could be typology testing or neat financial planning 📌 Pensioner wiring overseas, it could be laundering or a scam victim 👉 The UK Regulatory Context 💠  Under the Proceeds of Crime Act 2002 (POCA) and Money Laundering Regulations 2017 (MLRs), firms must file a SAR with the NCA when they know or suspect money laundering or terrorist financing. 💠 The FCA and FATF emphasise a risk-based approach: Firms are expected to apply judgement, looking at customer behavior relative to their risk profile, not to treat every flag as a suspicion in isolation. 💠 The NCA’s SARs guidance is clear: Quality matters more than volume. Good SARs articulate why an activity is suspicious in context, not just list a red flag. 🗣️ The Right Approach ◾ Use red flags as starting points for investigation, not end points. ◾ Train staff to interpret patterns, not just spot single anomalies. ◾ Document your suspicion both ways, either risk-based or reasonable ◾ Recognise that some red flags may indicate victims (for example: scam behavior) rather than perpetrators. ◾ Build a shared set of fraud + AML indicators (for example: sudden behavior change, mule-like account activity, high-risk jurisdictions) so both teams recognise overlaps early. Tune isolated red flags into actionable intelligence 🔎 ⚔️ Red flags are the just the beginning of the story, not the ending. Chaos isn’t a pit. Chaos is a ladder🪜. Do we climb it with judgement, or fall into the pit of box-ticking? #FinCrimeMythbusters #AML #CTF #FraudPrevention #SAR #FinancialCrimePrevention

5 Asset Line Items Where Fraud Hides and What I Look for in Each Most financial statement fraud parks itself in assets. The ACFE's 2024 RTTN puts financial statement fraud at just 5% of cases. But the median loss of $766,000 is the highest across all fraud categories. The damage is disproportionate precisely because it hides where people look least carefully. Based on my experience conducting forensic investigations in various countries for more than one and half decades, I consistently focus on five specific asset line items when searching for signs of fraud. Here’s what I pay attention to in each of them and why these areas often reveal hidden issues. 𝟭. 𝗧𝗿𝗮𝗱𝗲 𝗥𝗲𝗰𝗲𝗶𝘃𝗮𝗯𝗹𝗲𝘀 Not the balance. The ageing. Receivables that keep growing without being collected point to one of two things: revenue that was never real, or customers who were never meant to pay. 𝟮. 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆  I compare inventory growth against revenue growth and gross margin movement together. When inventory rises, and revenue rises, but margins quietly compress, something is being built into stock that does not belong there. 𝟯. 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗪𝗼𝗿𝗸 𝗶𝗻 𝗣𝗿𝗼𝗴𝗿𝗲𝘀𝘀  CWIP is one of the most consistently misused line items I encounter. Expenses get parked here to avoid hitting the P&L. Projects stay "in progress" for years. Nobody questions an asset that hasn't been commissioned yet. 𝟰. 𝗟𝗼𝗮𝗻𝘀 𝗮𝗻𝗱 𝗔𝗱𝘃𝗮𝗻𝗰𝗲𝘀  Particularly inter-company and related party advances. In several investigations, the actual fraud mechanism lived entirely in this line, i.e., funds moved out as advances, never returned, never written off, quietly evergreened each year. 𝟱. 𝗜𝗻𝘁𝗮𝗻𝗴𝗶𝗯𝗹𝗲𝘀 𝗮𝗻𝗱 𝗚𝗼𝗼𝗱𝘄𝗶𝗹𝗹  Inflated on acquisition. Never tested meaningfully for impairment. When goodwill stops making business sense, but impairment never appears, that’s a question for governance and not simply accounting. 𝗪𝗵𝗶𝗰𝗵 𝗼𝗳 𝘁𝗵𝗲𝘀𝗲 𝗵𝗮𝘃𝗲 𝘆𝗼𝘂 𝗲𝗻𝗰𝗼𝘂𝗻𝘁𝗲𝗿𝗲𝗱 𝗶𝗻 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗲? 𝗔𝗻𝗱 𝘄𝗵𝗶𝗰𝗵 𝗼𝗻𝗲 𝘀𝘂𝗿𝗽𝗿𝗶𝘀𝗲𝗱 𝘆𝗼𝘂 𝗺𝗼𝘀𝘁? #Fraud #ACFE #Accounting #ForensicForesight

Last week, a job seeker told me: “Sneha, I paid for ‘training material’ and never heard back from the recruiter.” Unfortunately, her story isn’t unique. I hear versions of this every single week. The reality is, fake job offers are on the rise. And scammers don’t prey on intelligence. They prey on desperation. Even the smartest professionals can get trapped if they don’t know the red flags. Here’s how to protect yourself 👇 🚩 Red Flags of Fake Job Offers 1️⃣ Unrealistic Salary → If it sounds too good to be true, it probably is. 2️⃣ Upfront Payment → No legitimate company asks you to pay for training, equipment, or background checks. 3️⃣ Suspicious Email IDs → Look for mismatched or fake domains (e.g., @company-careers.com instead of @company.com). 4️⃣ Vague Job Descriptions → Full of errors and no clear responsibilities. 5️⃣ Pressure Tactics → “Offer expires today.” Real employers give you time to decide. 6️⃣ Early Personal Data Requests → No company asks for bank details or SSN before interviews. 7️⃣ Text-Only Interviews → Legitimate employers conduct face-to-face or video interviews. 8️⃣ No Digital Footprint → A company with no LinkedIn presence or a website created last month? ✅ Quick Safety Checklist Before Accepting Any Offer ✔ Google the company & recruiter name. ✔ Cross-check salary ranges on Glassdoor, LinkedIn, or Naukri. ✔ Verify the recruiter on LinkedIn. ✔ Ask for an official offer letter on company letterhead. ✔ Never share sensitive details until an official process is in place. Job hunting is stressful enough. Don’t let scammers take your hope or your money. Stay vigilant. Protect your time, energy, and future. 👉 Have you or someone you know ever received a fake job offer? Share your experience, it might save someone else. P.S. Your job search should feel empowering, not risky. For more updated insights, strategies, and step-by-step frameworks to stay safe while growing your career. 📌 Join my Career Spotlight Group - https://lnkd.in/gB22r3_b