Scams Gain 10 Percentage Points in Share of Fraud Dollars

Fraud is shifting away from traditional data breaches and toward social engineering. For retailers and service providers, this means your customers are increasingly being tricked into authorizing fraudulent payments themselves. This trend is particularly dangerous for high-ticket businesses using financing, as scammers often target credit applications and large transactions where the customer believes they are paying a legitimate vendor. Banks and lenders are seeing a massive spike in 'authorized' fraud. Unlike a stolen credit card number, these scams involve the customer voluntarily sending funds or signing loan documents under false pretenses. This makes chargebacks and fraud disputes more complex for merchants to resolve. If your business relies on digital payments or remote financing applications, you are at the front lines of this shift. To protect your revenue, you must prioritize identity verification and customer education. Fraudsters are becoming more sophisticated at impersonating businesses to intercept payments. Strengthening your verification process at the point of sale isn't just about security anymore; it’s about protecting your customers' credit capacity and ensuring your settled transactions don't get tied up in lengthy bank investigations. As lenders tighten their own security protocols in response to these rising costs, merchants who provide a secure, transparent financing environment will maintain better relationships with their lending partners.

Source: PYMNTS

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