Transcript Document

Fraud and Risk in the Electronic
Payment Space
Michelle Marshall-Thompson
VP, Fraud/Risk Officer
FirstMerit Merchant Bankcard
General lack of understanding within the
payment space
• “Authorizations” are not a guarantee of payment
• Settlement of funds to a deposit account does not
ensure funds will not be retracted
• Inappropriate data verification
General lack of understanding of payment
risks
• Chargeback Risks
• Financial Risks:
Expense of payment acceptance
Loss exposure after payment acceptance
• Sensitive Data Security Risks:
Human behaviors
Network risks
Opportunities for Fraud
• Internal Fraud
• External Fraud
• Network Breach, Data Theft, Fraud
Internal Fraud
• Employee Embezzlement:
Fraudulent returns
Credentials theft
Misuse of position
Most unsuspecting person
Internal Fraud
• Compensating Controls:
Oversight
Password protection
Policies regarding information sharing
Random Google or background searches
External Fraud
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Fraudulent use of card information
Lost/stolen card numbers
Alleged fraud
Merchant financial exposure
External Fraud
• Compensating Controls:
Exposure of swiped, keyed & e-commerce transactions
Use of data verification: address, zip, CVV
Additional red flags
Work with banking partners
Network Security Risks
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PCI non-compliance
Human behavior
Banking credential hacks
Wire fraud, sensitive data breach
Network Risks
• Compensating Controls:
Utilize the expertise of third parties
Work within well established guidelines
Oversight of employee responsibilities
Where To Turn
• If you believe your organization/entity could be
vulnerable to risks reviewed today, contact me
directly at 330-849-8937, for further discussion
• Contact your banking institution to inquire about
additional controls and risk mitigating options
• Don’t expect to “go it alone” - work with your
partners
Thank you for attending!