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:

• 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.