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During our second session of Fraud Office Hours, an attendee asked, "What fraud types do money service businesses need to be aware of?"
Watch this video clip to see how Unit21's Head of Fraud Risk, Alex Faivusovich, responded.
Read the transcript:
"What is the recent fraud that money service businesses companies have to be aware of? So with money service businesses, I'll separate my response into two parts. I think, if we talk about the P2P segment, the real challenge is really about understanding what is a legitimate activity on the platform.
Try to build a business case around whether a customer or user of your platform is genuinely using your platform or is abusing the system and basically operating this money mule.
And it could be challenging because the transactions can be small. There are no longer tens of thousands of dollars. You can have many different small transactions and many different entities interacting with each other. And I think the way to go about it is, first, to have really strong link analysis capabilities and really try to understand how different users interact with each other.
Build scenarios that detect activities, one-to-many, and many-to-one, and have those different scenarios working together. And use bank analysis to really understand if a user is a legitimate user on your system, or he's just moving money from one place to another, and there's no business, just occasion to whatever activity you're seeing.
But I also think another money service business that's always a target for fraudsters is this company that either offers resale or provides direct access to buying gift cards. Basically, you're selling the money, and it's always a great target for fraudsters to come and try to buy those gift cards because once they have them, they don't need to do anything else.
That's it. That's real money they can use. They can resell it again. They can use it for themselves. And here, usually, the problem is that you can have the same bad actor coming to your platform over and over and over again because, basically, what they do is they try to have a very frictionless experience for buying those gift cards.
So many of those services will only require you to sign up with an email, and fraudsters have no problem generating hundreds of different emails and signing up over and over and over again. So here, again, you probably should look for different signals like devices and geolocations. Try to understand anomalies, not on a customer level, but on a platform level.
For example, if you have way too many users who try to access your platform from a certain geolocation where normally you don't have those users coming from there. So try to monitor things more on a platform level rather than on an entity level because the entity keeps changing over and over again. #Unit21 #FinTech #NoCode
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