From the outside, fraud and a dispute can look alike. The difference is why the account holder is unhappy.
| Fraud | Dispute (error) | |
|---|---|---|
| The question | Who started the transfer, and were they allowed to? | Was the transfer carried out correctly? |
| Sounds like | "I didn't authorize this." | "The fee was wrong" or "the money never arrived." |
| Rule | Regulation E Subpart A | Regulation E Subpart B |
| Who owns it | Your institution: the relationship, the investigation and the loss decision | The sponsor bank, with PayMitto doing the case work |
| Ticket type | Transaction Request, saying the account holder reports it as unauthorized | Dispute |
The three common kinds of fraud
- Account takeover (about two-thirds of remittance fraud): someone other than the account holder gets into the account and sends money. Strong sign-in security, such as multi-factor authentication at your institution, is the main defense.
- Scams (about one-third): the account holder is real and authorized the transfer, but was tricked into it.
- First-party misuse (a small share): the sender authorized the transfer and later disputes it, by mistake or on purpose.
Ask why, not just what, before you choose a ticket type.