Third Party Fraud

From Open Risk Manual

Definition

Third Party Fraud means a fraud that is committed by means of use of a person’s identity, such as the use of false identification documents, without the knowledge of the person whose identity is used to commit the fraud.[1]

Lending Context

The fraudster can be an individual without a business relationship with the firm (External Fraud) or an employee (Internal Fraud) and can involve existing client relationships (client is unaware) or new client relationships (real identity of client is unknown). If there is any active involvement of an existing client in the fraud, this is regarded as First Party Fraud.

References

  1. EBA/CP/2014/08

Contributors to this article

» Wiki admin