Fraud Prevention Flashcards

What is identity theft?

Answer: The unauthorized use of someone's personal information for financial gain

Identity theft involves criminals using stolen personal information to open accounts, make purchases, or commit crimes in the victim's name.

What are common signs of a phishing email?

Answer: Urgent language, misspelled sender addresses, requests for personal information, and suspicious links

Phishing emails often create false urgency, come from slightly misspelled addresses, ask for sensitive data, and contain links to fake websites.

What should you do if you suspect your bank account has been compromised?

Answer: Contact your bank immediately, change passwords, and monitor accounts for unauthorized activity

Immediate action limits damage: contact the bank to freeze suspicious activity, change all related passwords, and monitor statements for unauthorized transactions.

What is a Ponzi scheme?

Answer: A fraudulent investment that pays returns to earlier investors using new investors' money rather than profits

Ponzi schemes appear to generate returns but actually use new investors' money to pay earlier investors, eventually collapsing when new investment slows.

What is chip technology in credit and debit cards?

Answer: An embedded microchip that creates a unique transaction code for each purchase, reducing fraud

EMV chip cards generate a unique one-time code for each transaction, making it much harder to create counterfeit cards compared to magnetic stripe technology.

What is two-factor authentication and why should you use it?

Answer: A security method requiring two forms of verification, significantly reducing unauthorized access

Two-factor authentication adds a second verification step (like a text code) beyond your password, making it much harder for unauthorized users to access your accounts.