4 min read
Key takeaways
- Digital fraud attempts and attacks are on the rise. Putting proactive safeguards in place is key to helping your organization prevent fraud attacks before they happen
- Understanding and identifying fraud types and tactics can help you respond quickly should an attack succeed
- Leveraging our proactive prevention solutions can help your organization better detect, mitigate and respond to fraud
Despite precautions, fraud is prevalent across the industry. The facts speak volumes:
Overview
The prevalence of fraud—as well as the increase in digital fraud attempts and attacks—underlines the importance of putting safeguards in place to help prevent these attacks before they happen, and to manage the instances that succeed. The Federal Reserve has shared industry-wide fraud definitions to help you better understand the various types of fraud that can impact your organization. In this overview and the accompanying guide, we’ll take those definitions a step further to give you everyday examples of what these terms mean and explore tactics often used to commit fraud. We'll help you understand how our experts recommend proactively safeguarding against fraud, as well as how to deal with it efficiently if you become a target.
Identifying different fraud types
Manipulation. Altering payment information. Using stolen account information. These are just a few of the tactics used to execute fraud.
Using a phony invoice to commit product and services fraud is one method of manipulation, while relationship and trust fraud entails building relationships with the sole intent to receive money.
When an authorized party acts fraudulently, they may do so through embezzlement, falsely submitting a chargeback claim for merchandise they ordered but say they never received, or using fake credentials to create a synthetic ID.
As technology and AI-powered tools become more sophisticated, the prospect of scams using synthetic media tools to accurately replicate people’s voices, accents, photos and writing is growing. The use of deepfakes is becoming more prevalent, giving rise to increasingly powerful solutions to combat these types of attacks.
With payment information modification, fraudsters will compromise credentials by using stolen credentials to alter existing payments, impersonating someone to alter an existing payment, or physically altering a check.
Fraudsters may gain control over an account by using stolen credentials, or by impersonating an account owner using stolen information.
Consider passwords—what most use to secure their accounts. Around 70 to 80 percent of online data breaches are the result of password theft.3 As hackers’ ability to crack simple passwords has improved, many businesses are demanding users recall increasingly complex combinations of words, symbols and numbers to access their accounts. Advances in passkey technology are helping financial institutions and other enterprises secure account data and protect their customers from fraud.
Digital payments and forgery come into play for misuse of account or payment information, either from information on a found electronic payment check or by forging payment details and signatures on blank checks.
Download our fraud guide and checklist
Want more real-world examples and actionable tactics or to better understand the fraud terms and definitions above? Download our fraud guide and checklist for a deeper look into existing and emerging fraud types and to improve your preparedness against attacks.
Our fraud prevention specialists are available to discuss your unique business needs and how best to address your challenges and pain points. J.P. Morgan clients benefit from built-in fraud protection, but we also offer additional tools that can help you detect, mitigate and respond to fraud.
While you can't prevent every attack, understanding how fraud happens and how you can respond can help you reduce fraud attempts and react quickly and methodically to the ones that do happen.
© 2024 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. Non-deposit products are not FDIC insured.
The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit jpmorgan.com/paymentsdisclosure for further disclosures and disclaimers related to this content.
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