Fraud Jargon Explained

Navigating the world of resilience can be challenging, especially with the use of jargon and industry slang. At AJC, we understand these difficulties and aim to demystify these terms while providing advice on how to protect yourself. This series of articles will focus on different services we provide, starting with fraud prevention.

What is Fraud?

Fraud is the intentional deception carried out to gain an unlawful or unfair advantage, either through a criminal offence or a civil wrongdoing, depending on the severity and impact on the victim. Key aspects of fraud include:

• Deception: Misleading or deceiving someone, which can involve false statements, concealing material facts, or creating false impressions.
• Intent: There must be an intention to deceive and benefit, whether through financial gain, obtaining property or services, or avoiding a legal obligation.
• Harm: Fraud typically results in harm to the victim, such as financial loss, reputational damage, or identity theft.

Fraud Techniques and Terminologies

Fraudsters constantly develop new techniques to steal money and personal information. Here are some common types of fraud and associated terms:

• Account Takeover: Compromising accounts to assume the identity of the original account holder for personal gain.
• Advance-Fee Fraud: Fraudsters promise a large sum of money or goods in exchange for an upfront payment but never deliver.
• Brute-Force Attack: Trying many different password combinations to gain account access.
• Card Not Present: Fraudulent transactions where the cardholder is not physically present (e.g., online transactions).
• Chargebacks: When a cardholder disputes a transaction with their bank.
• Cheque Fraud: Altering or forging cheques to steal money.
• Credential Stuffing: Using stolen usernames and passwords from one data breach to log into other accounts.
• Friendly Fraud: A cardholder falsely claims they did not authorise a transaction.
• Identity Theft: Stealing personal information (e.g., name, date of birth, bank and/or card details) to impersonate and make unauthorised transactions.
• Malware: Computer viruses and other programs used to gain access to or disrupt computer functionality.
• Payment Fraud: Using stolen bank and/or credit card details to exploit payment system weaknesses for unauthorised transactions.
• Skimming: Stealing information from credit and/or debit cards using a skimming device attached to legitimate card readers.
• Social Engineering: Manipulation techniques used to trick people into revealing confidential information or taking actions that benefit the fraudster. They rely on complex technical hacking methods that exploit human trust and vulnerabilities by using traditionally trusted methods.
• Spoofing: Disguising a phone number, web address, or email address to appear legitimate.

Social Engineering Examples

• Baiting: Offering an enticement to lure victims into revealing information.
• Pre-texting: Creating a false situation to gain trust and extract information.
• Quid Pro Quo Scam: Promising something valuable in exchange for personal information or money.
• Phishing: Deceptive emails or websites designed to steal information or infect devices with malware. These emails often try to create a sense of urgency or impersonate a legitimate source like your bank, credit card company, or a familiar online service. A technique called spear-phishing is a personalised form of communication.
• Smishing: Using text messages to target victims with fake links or phone numbers to steal information, using similar tactics to phishing.
• Vishing: Using phone calls to impersonate a trustworthy entity and extract sensitive information. Vishing calls may claim to be from your bank or an allged technical support organisation. Scammers may try to pressure you into revealing sensitive information.

Other Fraud Terms

• Blackhat: A hacker with malicious intent.
• Cash-Out Mule: A person tricked into transferring stolen money.
• Catfishing: Creating a fake profile to deceive.
• Dark Web: A hidden part of the internet used for illegal activities.
• Internal Fraud: Theft or misuse of an organisation’s assets, resources, or data by its staff.
• Keystroke Logger: Software that captures details like passwords and banking information.
• Know Your Business (KYB): Regulations requiring organisations to verify the identities of businesses they deal with.
• Know Your Customer (KYC): Regulations requiring businesses to verify customer identities.
• Layering: Moving illegal money through multiple transactions to disguise its source.
• Modus Operandi (MO): A particular method or way of committing a crime.
• Money Laundering: Concealing the origin of money obtained from criminal activity.
• Muling: Transferring stolen money for a fraudster.
• Multi-Factor Authentication (MFA): Additional verification beyond a standard password.
• One Time Passcode (OTP): A mechanism for authorising particular transactions. An OTP acts as a secure key to your account, helping to stop anyone but you authorising transactions or making changes to your account.
• Parent/Grandparent Scam: Posing as a relative to ask for money due to an emergency.
• Pyramid Scheme: A deceptive business model promising money via recruitment of new participants.
• Red Flags: Indicators of potential fraud, like unusual or suspicious account activity.
• Smurfing: Breaking down large sums of illegal money into smaller deposits to avoid detection.
• Sweetheart Scam: Pretending romantic interest to gain trust and exploit victims financially or emotionally.
• Whitehat: An ethical hacker who identifies system weaknesses.

By understanding these techniques and terminology, can help you to be more vigilant and protect yourself from fraud. Remember, if something seems too good to be true, it probably is.

Tips to Stay Safe

• Be cautious about sharing personal information online.
• Use strong passwords and enable MFA whenever possible.
• Regularly monitor your bank statements and credit reports for suspicious activity.
• Don’t click on suspicious links or attachments in emails.
• Be wary of unsolicited opportunities or promises of unrealistic wins.
• Report suspicious activity to the appropriate authorities.
• Implement security measures such as anti-virus software to protect your data.
• Educate yourself and loved ones about fraud techniques.

By staying informed and cautious, you can better protect yourself from fraud.

Find out more about AJC’s Fraud Prevention services here.

Please contact us on 020 7101 4861 if you think we can help.

Image accreditation: Unsplash.com. Last accessed on 23.05.2024. Available here.