Fraud Prevention & Detection Flashcards
6 cards from real APRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Fraud Prevention & Detection flashcards as text
What is payment card fraud and what are its primary types?
Answer: Unauthorized use of payment cards including card-not-present fraud, counterfeit cards, lost/stolen cards, and account takeover
Payment card fraud encompasses multiple attack vectors including CNP fraud (online transactions without physical card), counterfeit cards (cloned magnetic stripes or chips), stolen credentials, and account takeover.
What is the role of machine learning in fraud detection?
Answer: Analyzing transaction patterns in real-time to identify anomalies that indicate potential fraudulent activity
Machine learning models analyze vast quantities of transaction data in real-time, identifying patterns and anomalies that indicate potential fraud with greater speed and accuracy than rule-based systems alone.
What is EMV chip technology and how does it prevent fraud?
Answer: A microprocessor chip in payment cards that creates a unique transaction code for each purchase, preventing counterfeit card fraud
EMV (Europay, Mastercard, Visa) chips generate a unique cryptogram for each transaction, making it virtually impossible to create counterfeit cards from stolen data, unlike magnetic stripe data.
What is social engineering in the context of payment fraud?
Answer: Manipulating people through deception to reveal confidential payment information or perform unauthorized actions
Social engineering exploits human psychology rather than technical vulnerabilities, using tactics like phishing, pretexting, and impersonation to trick individuals into revealing payment credentials or authorizing fraudulent transactions.
What is tokenization in payment security?
Answer: Replacing sensitive card data with a unique, non-reversible token that has no exploitable value if breached
Tokenization replaces sensitive payment card numbers with randomly generated tokens that have no mathematical relationship to the original data, rendering stolen tokens useless to criminals.
What are the key indicators of a potentially fraudulent transaction?
Answer: Unusual transaction amounts, geographic inconsistencies, velocity anomalies, and mismatched billing information
Red flags include transactions from unusual locations, rapid successive transactions, amounts inconsistent with the cardholder's pattern, mismatched AVS/CVV data, and shipping to high-risk addresses.