(MENAFN- Khaleej Times)

Fraud in the Buy Now, Pay Later (BNPL) market is on the rise. Along with account takeovers and refund scams, there's been a rise in triangulation fraud, friendly fraud, and refund abuse.

BNPL services have become a global sensation, they offer consumers the convenience of purchasing products immediately while deferring payments over time. From fashion to electronics, these services promise flexibility and comfort - but there's a hidden danger lurking behind the ease: fraud.

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As BNPL transactions surge worldwide, so do scams targeting unsuspecting users. UAE authorities are warning residents to be aware and understand the risks.

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How BNPL fraud take place Account takeovers

Fraudsters can gain access to user accounts through stolen login credentials, enabling them to make purchases in your name. Victims often only realise something is wrong when they receive bills for transactions they never authorised.

Weak authentication measures

Many BNPL providers still rely on minimal security checks. Without One-Time Passwords (OTPs) or real-time alerts for unusual activity, suspicious transactions can go unnoticed until it's too late.

Unresponsive providers

Even when fraud is reported, slow response times or poor customer support can leave victims bearing the financial burden. A delay in intervention can result in irreversible losses.

Why awareness is crucial

The rapid growth of BNPL usage has created an attractive target for cybercriminals. While providers continue to improve security, users must also take responsibility for protecting themselves. Vigilance, strong passwords, regular account monitoring, and reporting suspicious activity immediately can significantly reduce the risk of falling victim to BNPL fraud.

What are triangulation frauds

Triangulation fraud occurs when a scammer acts as a secret middleman in online purchases. They create a fake online store and take orders from customers. To deliver the items, they use stolen credit card details to buy the products from real sellers. The customer still gets what they ordered, so they may not realise they were part of a scam.

How does triangulation fraud work?

The typical triangulation fraud scheme has three stages and involves four parties: an innocent buyer, a victim of credit card theft, a merchant and the scammer.

A scammer posts a sales listing for a desirable item, such as a pair of headphones, often for an unusually low price. A buyer comes along and enters their credit card information to purchase the headphones.

The scammer receives the payment and now has access to the buyer's account information. They then buy headphones from a legitimate retailer using a separate stolen credit card and have them shipped to the buyer.

The buyer receives the headphones and may have no reason to question the purchase, so they don't raise an alarm. Meanwhile, the owner of the stolen credit card is out the cost of the headphones. They may reach out to the legitimate merchant for a refund, but the fraudster will still have the money from the original buyer.

How to protect yourself

Authorities have often shared valuable tips on how to protect oneself from online scams and fraudsters. Below are a few steps consumers should keep in mind while shopping online.

• Use strong, unique passwords for BNPL accounts.

• Enable two-factor authentication wherever possible.

• Monitor account activity regularly and set up alerts if available.

• Report suspicious transactions immediately to the provider.

BNPL services offer undeniable convenience, but with convenience comes responsibility. Being informed and cautious can help you enjoy the benefits without falling prey to the rising tide of fraud.

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