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International Fraud Investigation Enhances Risk Monitoring for Leading Payment Processor
A large international payment processor was confronted with a surge of suspicious activity among certain merchants. One group of merchants rapidly processed numerous transactions before disappearing, while another displayed unusually high transaction growth. These patterns raised significant concerns about potential financial crime, prompting the client to seek our expertise for a comprehensive investigation. The challenge was intensified by the complexity of international transactions and the need to act swiftly to prevent further risks to the card network. In addition, this fintech company faced pressure from its banking partners to increase detection and investigation capabilities or risk being denied their access to financial channels.
A team from Dominion Advisory Group—now part of SolomonEdwards—promptly launched an in-depth investigation, uncovering that a domestic payments company had been approving new merchants with minimal due diligence. Weaknesses in the internal monitoring systems failed to detect high-risk behaviors, allowing fraudulent merchants to use the payment system to test stolen card numbers. Leveraging advanced data analysis, we identified numerous additional “bust-out” accounts—merchants that disappeared after exploiting active card information.
We provided actionable insights and helped the client sever ties with these fraudulent accounts. Additionally, we integrated our investigative approach into the payment processor’s AML risk monitoring systems, enabling proactive detection of similar schemes in the future. This process not only resolved the immediate threat but also strengthened the client’s ability to manage financial crime risks going forward.
As a result of our investigation, the payment processor significantly enhanced their ability to identify and mitigate fraud risks and enhance compliance. The integration of our methodologies into their risk monitoring systems led to improved internal controls and reduced exposure to similar threats, enabling the client to shore up its defense against financial crime risks. Moreover, following our remediation response, this fintech’s financial partners relaxed their concerns and grew their banking relationships.
Dominion Advisory Group, now part of SolomonEdwards, brings specialized expertise in anti-money laundering (AML) advisory and financial crime consulting. Learn more about our services in the Banking & Financial Services industry.