Triangulation Fraud

Overview

Triangulation fraud occurs when fraudsters set up fake online stores to take orders, then purchase goods with stolen payment details and ship them to customers. While the customer receives the product, the merchant selling it incurs chargeback losses. Fraudsters profit from selling goods at discounted prices, hiding behind multiple layers of deception.

E-commerce platforms, payment providers, and banks face significant exposure to triangulation fraud. Detection relies on monitoring unusual transaction patterns, device fingerprints, and inconsistencies in customer/merchant behavior. Regulators expect payment providers to have controls against card-not-present fraud, including triangulation schemes, to protect consumers and merchants.

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