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.

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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:

Customers Defrauding Agents:
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.
Creating and using fake vouchers to obtain cash or electronic value.
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:

Agents Defrauding Customers:
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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