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Triangulation fraud

Triangulation fraud

Triangulation fraud definition

Triangulation fraud is an online scam involving three parties: an unsuspecting buyer, a genuine seller, and a fraudulent seller as a middleman.

See also: scam

How triangulation fraud works

  1. The scammer sets up a fake online store offering products at significantly reduced prices to lure buyers.
  2. When a victim buys something from them, the fraudster takes the order and uses stolen credit card details to get the same product from a genuine online store.
  3. The real seller then ships the product directly to the victim, believing they made a legitimate sale.
  4. The scammer keeps the money from the original sale. Plus, they never had to handle the actual product.

Damage of third-party fraud

  • Stolen money. The scam relies on using stolen credit card data, which means someone is paying for the product without knowing about it.
  • Loss for the seller. The genuine seller faces chargebacks when the true owner of the stolen card disputes the transaction.
  • Loss for the buyer. While receiving the product, the victim may end up with substandard goods or face issues if they attempt to return or service the product.
  • Reputation damage. Genuine sellers can have their reputation tarnished if victims believe they were part of the scam.
  • Legal issues. All parties can get entangled in legal troubles, especially if they try to trace back the fraudulent transactions.

Further reading

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