Fraud Prevention & Detection Flashcards
7 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 7 Fraud Prevention & Detection flashcards as text
Which technique involves analyzing the velocity of transactions from a single card or account over a short time window to detect fraud?
Answer: Velocity checking
Velocity checking monitors how frequently a card or account is used within a defined time period to flag unusual bursts of activity.
A fraudster uses stolen card data to make small test purchases before large fraudulent ones. This technique is best described as:
Answer: Carding
Carding involves testing stolen card credentials with small transactions to validate the card before committing larger fraudulent purchases.
What does 'false positive' mean in the context of fraud detection systems?
Answer: A legitimate transaction incorrectly flagged as fraud
A false positive occurs when a fraud detection system incorrectly blocks or flags a legitimate transaction, harming the customer experience.
Which of the following is a primary benefit of using machine learning models over rule-based systems for fraud detection?
Answer: They can adapt to new fraud patterns without manual rule updates
Machine learning models continuously learn from new data, allowing them to detect evolving fraud patterns that static rule sets would miss.
In payments fraud, 'synthetic identity fraud' refers to:
Answer: Combining real and fictitious information to create a new identity
Synthetic identity fraud blends real data (like a valid SSN) with fabricated information to create an identity that passes initial verification checks.
Which network-level fraud prevention tool allows issuers to share real-time data about compromised cards across the payment ecosystem?
Answer: Compromised Account Management System (CAMS)
CAMS is an industry utility that enables issuers and card networks to communicate about compromised card accounts in near real time.
A merchant notices a sudden spike in chargebacks from customers claiming they never made purchases. This pattern most likely indicates:
Answer: Merchant data breach leading to card-not-present fraud
A spike in 'transaction not recognized' chargebacks often signals that card data stored by the merchant was compromised and is now being used fraudulently.