Types and Prevention of Payment Fraud
This article provides a comprehensive overview of 14 common payment fraud tactics, including phishing, account takeover, and wire transfer fraud, highlighting the projected $362 billion in global losses by 2028. It emphasizes the need for organizations, particularly in e-commerce and finance, to implement layered defenses such as PCI compliance, 3D Secure authentication, and machine learning-based anomaly detection to mitigate financial and reputational damage.
Detection / HunterGoogle
What Happened
Payment fraud is a massive and growing problem where criminals steal money through unauthorized transactions or scams. Businesses in e-commerce, healthcare, and banking are especially targeted because they handle valuable personal and financial information. If left unchecked, this fraud can lead to massive financial losses and damaged customer trust. To protect themselves, businesses should use secure payment systems, require multi-factor authentication, and train employees to spot scams.
Key Takeaways
- Global business losses from online payment fraud are projected to surpass $362 billion between 2023 and 2028.
- The article identifies 14 common types of payment fraud, including phishing, account takeover, chargeback fraud, and ACH fraud.
- E-commerce, healthcare, and banking sectors face the highest risk due to the sensitive financial and personal data they handle.
- Effective mitigation requires foundational controls like PCI compliance and 3D Secure (3DS) authentication, supplemented by advanced machine learning detection.
Affected Systems
- E-Commerce Platforms
- Point-of-Sale (POS) Systems
- Mobile Payment Applications
- Banking and Financial Systems
Attack Chain
Attackers utilize social engineering, phishing, or credential theft to compromise user accounts or trick victims into initiating transfers. Once access is gained or trust is established, the attackers execute unauthorized transactions, redirect funds, or purchase unrecoverable assets like gift cards. The stolen funds are then laundered or exfiltrated, leaving the business or consumer with financial losses and chargebacks.
Detection Availability
- YARA Rules: No
- Sigma Rules: No
- Snort/Suricata Rules: No
- KQL Queries: No
- Splunk SPL Queries: No
- EQL Queries: No
- Other Detection Logic: No
No specific detection rules or queries are provided in the article.
Detection Engineering Assessment
EDR Visibility: None — The article discusses financial fraud and social engineering, which typically occur at the application or human level, outside the scope of endpoint detection and response tools. Network Visibility: Low — Network telemetry might catch domain spoofing or phishing links, but the actual fraudulent transactions happen at the application or payment processor level. Detection Difficulty: Hard — Distinguishing between legitimate user transactions and fraudulent ones (like friendly fraud or account takeover) requires complex behavioral analytics and machine learning.
Required Log Sources
- Application Logs
- Authentication Logs
- Payment Gateway Logs
Hunting Hypotheses
| Hypothesis | Telemetry | ATT&CK Stage | FP Risk |
|---|---|---|---|
| Look for sudden spikes in account creation from single IP addresses or unusual geolocations, indicating potential New Account Fraud. | Authentication Logs | Initial Access | Medium |
| Identify accounts with multiple failed login attempts followed by a successful login and an immediate, high-value purchase or password change. | Application Logs | Credential Access | Low |
Control Gaps
- Lack of Multi-Factor Authentication (MFA)
- Insufficient vendor verification processes
- Absence of 3D Secure (3DS) authentication
Key Behavioral Indicators
- Unusual transaction volumes or velocities
- High chargeback or dispute rates
- Mismatched billing and shipping addresses
- Sudden changes to account contact information prior to purchases
False Positive Assessment
- High
Recommendations
Immediate Mitigation
- Implement Multi-Factor Authentication (MFA) for all user and employee accounts.
- Review and enforce strong password policies across the organization.
Infrastructure Hardening
- Ensure payment systems comply with PCI DSS standards.
- Implement network tokenization for customer data.
- Deploy 3D Secure (3DS) authentication for transactions.
User Protection
- Offer customers real-time notification options for purchases and account activity.
- Display warnings about gift card scams and phishing during the checkout process.
Security Awareness
- Train employees to recognize phishing, social engineering, and fraudulent checks.
- Establish clear, out-of-band verification procedures for vendor payments and wire transfers.
MITRE ATT&CK Mapping
- T1566 - Phishing
- T1078 - Valid Accounts
- T1583.001 - Acquire Infrastructure: Domains
