Imagine a sports gambler losing a significant amount of money on a bet; it’s an all-too-common feeling in today’s world. However, this person has another idea. “What if I tell my bank it wasn’t me?” They research their bank’s dispute process, hoping that they might be able to make the charge disappear. Their reasoning? It’s a large institution managing millions of transactions every day, so they might cover the cost without question.
Now, picture yourself opening a new bank account. Your debit card is in the mail. Two days later, your phone rings from someone claiming they're from the bank. There's been suspicious activity on your new account, and they need to verify your information right now — before it gets worse. You feel a flash of panic. You just opened this account and have no idea what normal is supposed to look like yet.
Finally, imagine you're the adult child of an elderly parent living in a care facility two states away. Your parent is independent, proud and sharp. However, a few months back they mentioned a new friend, someone kind who calls every day. You didn't think much of it at the time. Then, one week while reviewing their bank statement, you notice something: a wire transfer, then another, both to someone you've never heard of.
These aren't rare situations; they happen across millions of bank accounts every single day. What connects them isn't software vulnerability or a technical failure: it’s human psychology.
After working in retail banking fraud, I've come to believe that the biggest gaps in fraud prevention are about understanding people: how we feel under pressure, how we make decisions in specific moments and what makes us vulnerable in ways we often don't see coming.
Fraud Follows Human Emotions
Fraud isn't random. It has seasons, just like human emotions have seasons. Every year around Mother's Day, flower purchases spike. Around the winter holidays, gift card sales surge. In summer, people spend more on utilities, travel and home improvement. During professional sport seasons and major gaming events, betting platforms see enormous volume. Fraud spikes are patterned around these instances. High transaction volume gives fraudsters cover, and people in emotionally charged moments are easier to manipulate. The person rushing to find a last-minute gift might be less careful about where they enter their card number. The fan riding the energy of a big game may let their guard down. The excitement, the urgency, the holiday rush: all of it creates a window that is predictable.
When the Customer is the Threat
Let’s go back to the sports gambler, the bad loss and the thought to dispute the “fraudulent” charge.
This is called first-party fraud: a real customer filing a false claim on a transaction they actually made. It's more common than most people realize, and the psychology behind it isn't hard to understand. Losing money hurts, and the rationalization that the bank can afford it comes fast. Perhaps this person has been a loyal customer for years, so this one time won’t be a problem. In the moment, it sounds more like self-preservation than fraud, but the action that follows is one and the same.
Some people don't stop at once. They discover the process works and repeat it, opening multiple accounts, learning the gaps and filing claims at a pace designed to stay under the radar at any single institution.
What many customers don't fully appreciate is that banks can see the complete authentication trail, from the session, device, IP address and one-time passcode sent to a specific phone and confirmed. Through this, one pattern surfaces consistently: a customer who disputes every gambling loss but never disputes a gambling win. That tells a very specific story, and the data tells it clearly even when the claim doesn't.
Targeting New Account Holders
Most people never think about the days right after receiving a new bank card as some of the highest-risk moments in the customer-bank relationship.
The card exists. The account is live. But the customer may not be watching account activity yet. They may not have activated the card, monitoring the account closely or have a baseline for what normal activity looks like. If someone intercepts that card in the mail, they can start spending before the customer even realizes something is wrong.
New account holders face another vulnerability: They don't know how their bank communicates, what a legitimate call sounds like, or what to expect if fraudulent activity occurs. That window of unfamiliarity is exactly what experienced scammers look for. It's the moment to pose as the bank, create urgency and ask for information from someone who has no instinct for what's real.
When a Relationship Becomes the Crime
The scenario of an elderly parent and a bank statement with unfamiliar transfers is one of the most calculated fraud patterns in retail banking — and one of the slowest to surface.
Older Americans with accumulated savings are deliberately targeted. The reasons are specific: wealth built over decades, limited day-to-day account oversight, family members who may live far away and sometimes a real longing for connection. Fraudsters are patient enough to exploit any opportunity presented to them.
These frauds targeting seniors often don't start with a transaction. They start with a relationship: a new friend, a romantic interest, someone who calls every morning and remembers small details. By the time money moves, the emotional foundation has been under construction for months. The victim isn't being tricked into a bad click. They are making a willing choice for someone they genuinely believe cares about them.
No detection model catches the relationship. It can only catch what comes after. The signals that matter are relational, such as a new name added to an account, an unfamiliar recurring payee or a quiet shift in who is accessing the account.
The Pattern Underneath Everything
Every scenario in this article is driven by an emotional state:
- Urgency and lowered caution like the holiday shopper or excited sports fan. Unfamiliarity seen in the new customer who doesn't fully understand security measures.
- Loneliness and manufactured trust often found in elder exploitation.
- Regret and rationalization by the customer who wants to undo a bad decision.
Fraud works because these emotional states are universal. Every one of us has felt them, as it's what it means to be human. These situations signal that the most important question in fraud prevention isn't only: "Does this transaction look suspicious?" It's also: "What is this person experiencing right now?"
The technology for detecting fraud has never been better, but one of the most powerful tools in fraud prevention is still a deeper understanding of people.
What This Means in Practice
For fraud fighters and strategic teams:
- Build a fraud calendar. Map expected legitimate spending by merchant type against historical fraud spikes such as holidays, gaming seasons, summer travel and other predictable windows. Recalibrate model thresholds before those windows, not after. A model that isn't seasonally tuned will be predictably wrong for stretches of the year.
- Treat new account and card issuances as elevated risk windows. Apply tighter monitoring in the first 30 to 90 days. Send new customers a simple, clear message about how the bank will and won't contact them. One clear communication can undercut impersonation scams before they start.
- Build a monitoring framework for older customers. Specifically, a control that watches for relational changes, including new authorized users, new beneficiaries, unfamiliar recurring payees or unusual outgoing transfers. Lower the threshold for outreach when activity doesn't fit the customer's normal pattern. Have a clear escalation path to elder financial exploitation response teams.
- Evaluate fraud claims in full behavioral context. These can include authentication records, device consistency, timing and patterns across a customer's dispute history. Watch for disputes concentrated in specific merchant categories like gambling. Make the investigation process visible to customers at the point of filing. Transparency about what banks can see can be a deterrent in itself.
- Track false positive rates as explicitly as fraud loss. Every unnecessary block erodes customer trust and weakens the controls that depend on customer engagement. Precision matters as much as sensitivity.
For consumers:
- During holidays, big games and emotionally charged moments, slow down before you pay. Urgency is one of the fraudster's most reliable tools.
- If anyone asks you to pay for something using gift cards — whether it's a fine, a prize, a bill or anything else — treat it as a scam. Legitimate businesses and government agencies will not demand payment that way.
- When you receive a new bank card, activate it immediately and turn on account alerts. If it doesn't arrive on time, call your bank right away. If you receive a call from your "bank" shortly after opening a new account, hang up and call back using the number on the back of your card to ensure you have control over who you’re speaking to.
- If you have an elderly parent or relative, review their account statements once a month. Talk with them openly about how fraud schemes begin and ways to protect themselves from exploitation.
- The data trail from a banking session is far more detailed than most people realize. Before filing a dispute, ask yourself: Did something genuinely go wrong, or did I make a decision I now want to undo?
- Your one-time passcode is yours alone. The moment someone else asks for it, that's the scam.
Fraud has always been a people problem. The tools change but the human vulnerabilities don't. Building behavioral checks and balances into your anti-fraud strategy protects both the institution and customers from fraudsters looking to manipulate human emotions and behaviors for financial gain.
