1. Bankers Association of Trinidad & Tobago (BATT)
Anti-Fraud Committee
Fraud Awareness For Merchants

2. Objectives
Educate as to how certain fraud typologies can affect you, the merchant
To be more aware of fraud and fraud incidents in the workplace and business environment
To provide tips on how to prevent and/or reduce the risk of you and your business becoming a victim of fraud

3. Legal Definition of Fraud
“ A false representation of a matter of fact— whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.”
(Source - Blackstone’s Legal Dictionary)

4. A material false statement, knowledge that the statement was false when uttered, reliance on the false statement by the victim to act on it and damage as a result

5. Fraud Internal and/or External
The Internal Elements of Fraud
What happens at your place of business
The External Elements of Fraud
Is your place of business a target for Organised Crime (fraud)

6. Definition of Internal Fraud (Association of Certified Fraud Examiners - ACFE)
Internal Fraud a.k.a. – occupational fraud can be defined as:
“the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets.” Simply stated, this type of fraud occurs when an employee, manager, or executive commits fraud against his or her employer.

7. Why Does Fraud Occur
The best and most widely accepted model for explaining why people commit fraud is the fraud triangle. This is a model developed by Dr. Donald Cressey, a criminologist whose research focused on embezzlers—people he called “trust violators.” 

8. Fraud Offences Include  Fraudulent Conversion  Falsification of Account  Obtaining by False Pretence  Embezzlement  Uttering Forged Documents  Dishonoured Cheques

9. What is Fraud
You may not be able to prevent yourself from being a “Target” to fraud…
…but you do not have to be a “Victim”

10. Risk of Fraud - Payment Channels
Credit Card
Managers Cheque
Online (wire transfers)

11. Card fraud
Section 1

12. Card Fraud - Skimming What is Skimming
“The surreptitious act of copying the encoded card information off the magnetic strip of either a credit or debit card with the intent to create a cloned card to facilitate fraudulent transactions on the legitimate account”
(Source - BATT)

13. Skimming – Where & How At the Cashier Hand held skimming device
Cards are swiped unsuspecting of the customer using skimming device

14. Card Fraud – Lost/Stolen Cards
Cards are taken at the point of purchase
Cards used without the consent of the card/account holder (domestic situation)
Lost Cards
Lost cards are used to assist with stolen card typology
Report lost/stolen cards to your bankers immediately
Be aware of the bank’s hotline numbers and reporting options for your bankers

15. Credit Card & The Merchant
Rogue Employee – using skimming device (reputational risk)
Bust Out Merchant Fraud – colluding with the fraudster in using stolen/fraudulent cards (prosecution) – gets a % of the settlement (operating a/c)
Proof in the receipt – as evidence of sale (proper storage)
Ecommerce merchants – Data security

16. Credit Card Payments Be wary of suspicious card holder behaviour
More than one card to effect one purchase
Choosing goods randomly/ shopping in groups
Purchasing multiple high ticket items
Multiple foreign Cards in his/her possession
Compare the signature on the receipt, by holding on to the card, against the signature on the reverse of the card
Ensure the gender of the card corresponds to the customer

17. Tips To Reduce risk (internal)
Monitor payment area/workstation for skimmers/lost cards
Educate/train your employees
Examine your terminals (portable)
Segregation of Duty (business cards/ reconcile account)

18. Managers Cheques

19. Cheque Fraud Managers Cheques
Call your bank to verify cheques drawn on your bank
Do not release goods/services before verifying the authenticity of the cheque
Exercise caution when dealing with ‘new clients’
Ask for your account relationship manager to verify the cheque
Look for the security features listed on the face of the cheque – these features are listed next the padlock
Look for the bleed through feature on the MICR line

20. Wire Transfer Fraud

21. New Facts About Cyber Threats
In 2008, a cyber attack effectively crippled the entire nation of Estonia for a few days.
In 2009, the US president called cyber threats one of the greatest challenges to his country’s economy and national security.
Q1 2013, McAfee detected 14 million new pieces of malware.
In 2013 there are 82,000 new malware variants discovered per day.
In 2015, a survey found that the greatest threat to businesses are cyber-related threats.

22. Banking Related Wire fraud Threats
Phishing
A fake pretending to be from a bank or other organization claiming to need your account details or other personal information
Malware (banking malware)
Malicious Software (specifically designed for financial transactions)

23. Wire Transfer Fraud Hard Copy Instructions via Letter Heads
Sent to the bank via courier
Subsequent calls to support instructions
Internet – Cyber Crime
Sending instructions to your banker via to process wire
Intercepting s with payment arrangements and redirecting wire to another account, at another bank, in another jurisdiction.

24. Tips to Reduce the Risk of Wire Transfer fraud (cyber crime)
Do not send private or financial information via an unsecure address
Do not respond to unsolicited s
Do not access any online facility via an
“Don’t be the weak link…Don’t click on the hyperlink”
(Source - BATT Inter Bank Fraud Committee)
Reconcile your account/s on a regular basis.

25. Basic Online Security Tips
Use (and protect) strong PINS and passwords (use phrases e.g “Lara is the best”; “election is tomorrow” etc.)
Keep computers updated (No Windows XP!)
Do annual security awareness training (include social engineering training)
Get experts to install and maintain firewalls & anti- malware
Do online banking from secure computers only
Be careful what you put online (website, social media)
Use safely

26. Questions