What are frauds and tricks in high risk merchant account?
With so many digital and cyber crimes, it is very much obvious to figure out that frauds and deceiving tricks are still associated with high risk merchant account and proves to be a financial loss for business owners. There are three most common types of frauds which are somewhat difficult to know about and to correct as well. To detect the frauds is of dire need as these tricks may affect the business and the acquirers badly through transactions, fee and chargeback. Those who would be found in doing such digital crime should be liable to strict legal actions. To deal with these frauds is bi tricky yet necessary to avoid any kind of reputational damage and the risk of chargeback and fines.
What are the top 3 types of frauds in high risk merchant account?
Following are the three most common types of frauds and deceiving tricks that must be known by merchant account providers and users both.
- Bust out frauds:
This is the foremost type of frauds in which an individual with an aim of deceiving will apply for so many merchant accounts and will get too many credit cards for making false transactions. For an instance, fake business owners would apply for about thousands of fake identities and get as many accounts and then process deceitful transactions with false credentials.
- Identity swap:
In most of the cases, those individuals whose names have been given in the sanction list belonging to various countries due to certain issues like religious extremism, economic sanctions or because of country’s growth progress are not allowed to open merchant account with major acquiring banks. Such groups of individuals then go for the deceiving tricks by swapping their identity to create a bogus account. In such case, you identity is unsafe as it can be stolen or hacked. Therefore, identity must be kept secret in order to avoid identity theft and the risk of getting your account hacked.
- Transaction laundering:
Major portion of risks and frauds are linked with transactions. Same as money laundering, transaction laundering is a money theft which occurs when your all account information goes to hackers they can process your payments without your knowledge. After identity swap, this fraud is supposed to be the most serious concern. In transactional laundering, the other person will use the credentials of merchant’s account and as a result serious and severe explosions would be made on high risk merchant account. This is an important concern that transactions of about 6 percent could be done without the consent of acquirer. This is a growing and serious problem and it needs to be fixed by taking frequent precautionary measures.