The Fraud Triangle¶
Fraud Triangle, a framework for understanding the factors that may lead to committing fraud. It outlines three key elements: opportunity, pressure, and rationalization. These elements are often referred to as the three legs of the fraud triangle. The fraud triangle is a useful tool for understanding the factors that may lead to committing fraud. It outlines three key elements: opportunity, pressure, and rationalization. These elements are often referred to as the three legs of the fraud triangle.
- Opportunity: This element of the triangle suggests that individuals commit fraud because they can; they have the means to execute the plan without being detected.
- Pressure (Risk Treatment): Here, individuals feel a financial or emotional force that compels them toward fraudulent behavior, often due to financial stress or unattainable performance targets.
- Rationalization: This is the mental process where individuals justify their fraudulent actions to themselves, often by downplaying the seriousness or shifting the blame to justify their dishonest actions.
Customer Fraud:
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Customers Defrauding Agents:
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Depositing counterfeit currency to exchange for electronic value or legitimate currency.
- Unauthorized access of agents' POS devices to perform fraudulent transactions.
- Unauthorized transactions via an agent’s web channel.
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Creating and using fake vouchers to obtain cash or electronic value.
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Customers Defrauding Customers:
- Gaining unauthorized access to other customers' PINs to conduct transactions.
- Identity theft to access other customers’ accounts.
- Phishing and SMS spoofing to deceive agents with seemingly legitimate messages.
Agent Fraud:
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Agents Defrauding Customers:
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Unauthorized access to customers' PINs for fraudulent transactions.
- Charging unauthorized fees and keeping them instead of remitting to the intended provider.
- Conducting split withdrawals to earn higher commissions, thereby defrauding customers.
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