Fraud Fundamentals
Core concepts and frameworks for effective fraud management.
Essential Reading
Economics of Fraud
Understanding the true cost of fraud:
- Direct loss from fraud
- False positive cost (lost revenue)
- Operational cost (review, investigation)
- Customer experience impact
Risk Appetite
Balancing competing objectives:
- Fraud loss tolerance
- Customer friction tolerance
- Conversion rate targets
- Regulatory requirements
Popular in This Section
- Economics of Fraud - Understanding total cost of fraud
- Risk Appetite - Balancing loss tolerance with conversion
Key Principles
- Not all fraud is created equal – First-party (customer abuse) and third-party fraud (stolen cards) require different responses
- Prevention has costs too – False positives hurt revenue and customer relationships (see Economics)
- Speed matters – Early detection limits losses; see Detection Framework
- Data is your weapon – Invest in device fingerprinting, velocity rules, and evidence collection
- 3DS is your friend – 3D Secure shifts liability for stolen card fraud to issuers
Related Topics
- Fraud Types - Taxonomy of fraud patterns
- Detection Methods - How to identify fraud
- Prevention Strategies - How to stop fraud before it happens
- Chargebacks - When fraud becomes disputes
- Fraud Metrics - Measuring fraud performance
- Network Programs - Threshold consequences
- 3D Secure - Authentication trade-offs
- Rules vs ML - Detection approaches
- Benchmarks - Industry comparisons