A

  • Account Takeover Fraud (ATO)

    When a legitimate customer’s account is illegally accessed for the purposes of committing fraud.

  • Actuary

    A statistician who computes insurance risks and premiums.

  • Address Verification System (AVS)

    System used to check the billing address of credit cards with the address on file at the credit card company. AVS is widely supported by Visa, Mastercard, and American Express in the US, Canada and the UK.

  • Aggregator

    Single sign on companies. Consumers set up accounts at a single sign on company such as Mint to manage all of their finances.

  • Application Fraud

    Applying for a policy using a stolen or synthetic identity.

  • ATO
  • AVS

B

  • Broker

    Individual who receives commissions from the sale and service of insurance policies. These individuals work on behalf of the customer and are not restricted to selling policies for a specific company but commissions are paid by the company with which the sale was made.

C

  • Call Center Fraud

    Fraudsters gather data about customers and then combine high-pressure tactics with spoofing technology to socially engineer agents and take over customer accounts or apply for a new account or line of credit.

  • CIFAS
  • Claim

    A request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.

  • Claims Fraud

    A fraudster files a false insuance claim to attempt to get a fraudulent payout.

  • Collusion

    Two or more parties acting together to defraud.

  • Crash for Cash

    In Crash for Cash scams, fraudsters deliberately crash into the vehicles of innocent motorists or submit false claims for accidents.

  • Credit Industry Fraud Avoidance System (CIFAS)

    A fraud prevention service in the United Kingdom. It is a not-for-profit membership association representing organisations from across the public, private and voluntary sectors. In 2016, CIFAS had over 360 member organisations.

F

  • False Decline / False Positive

    When a legitimate customer’s transaction is mistakenly declined, generally for suspected fraud.

G

  • GDPR
  • General Data Protection Regulation (GDPR)

    Regulations for businesses in the EU or anyone processing transacations from EU end users specifying what personal data can be collected and how it can be used. Also specifies fines for noncompliance.

  • Ghost Brokers

    A fraudster who masquerades as a legitimate insurance broker. They will source a policy from a legitimate insurer using fraudulent payment, then take payment from the customer. After receiving proof of insurance from the company, the ghost broker passes it on to the customer, but when the check doesn’t clear or the credit card is found out to be stolen, the insurer cancels the policy and the customer is unaware.

I

  • Indemnification

    The act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss.

K

  • Know Your Customer (KYC)

    The process of a business verifying the identity of its clients and assessing potential risks of illegal intentions for the business relationship. The term is also used to refer to the bank regulations and anti-money laundering regulations which govern these activities.

  • KYC

M

  • Mid-Term Adjustment (MTA)

    Mid-term adjustment (MTA) or mid-term modification refers to any change made to an insurance policy after it's started. e.g., changing an address four months after an insurance policy began would be a mid-term adjustment.

  • MTA

N

  • National Insurance Crime Bureau (NICB)

    A North American, not-for-profit organization that partners with insurers and law enforcement agencies to facilitate the identification, detection, and prosecution of insurance criminals.

  • NICB

P

  • Payment Fraud

    Any type of false or illegal transaction completed by a cybercriminal.

  • Payment Services Directive (PSD)/PSD2

    PSD2 is an update to the Payment Services Directive (PSD) that was adopted in 2007 by the European Commission (EC). PSD created the legal foundation for a Single Euro Payments Area (SEPA), essentially establishing a single market for payments (e.g. credit transfers, direct debits, cards) in the European Union.

  • Policy

    A written contract ratifying the legality of an insurance agreement.

  • Policy Fraud

    Fraudster uses a stolen identity or synethetic identity to apply for a fraudulent insurance policy, either as a ghost broker or to make false claims.

  • Proof of Loss

    A statement made regarding the extent of the claim; it may be requested in accordance with the conditions of the policy.

  • PSD2

Q

  • Quote

    A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote including drivers, vehicles, and driving record.

S

  • SCA
  • SIU
  • Social Engineering

    A non-technical method of intrusion used by hackers to commit fraud. It relies on human interaction and often involves tricking people into breaking normal security procedures.

  • Special Investigations Unit (SIU)

    Investigations unit responsible for investigating fraudulent claims.

  • Strong Customer Authentication (SCA)

    Increased requirement under PSD2 for securing online payments using Strong Customer Authentication (SCA). SCA must use two or more of the following independent factors: Knowledge, Possession, Inherence

  • Synthetic Fraud

    Fraudsters create a false identity using bits of real and fake data combined to form a new fictitious identity, then use it to obtain credit, make purchases or open new accounts.

U

  • Underwriting

    The process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.