With the increase in popularity of various payment systems or cryptocurrencies, the risk of fraudulent transactions also increases. Anyone who sells or buys things over the Internet can become a victim of a triangle fraud. "The victim will suffer property damage, but also moral damage. He will be left with a feeling of guilt for letting himself be deceived, or of helplessness, since there is little chance that the perpetrator will be punished. That is why the vigilance of those who enter into various relationships in the online space is paramount," explains attorney Tomáš Balun from the L/R/P law firm in an interview.

On what principle are triangle frauds built? How are they different from other types of scams?

Triangle scams are a very sophisticated type of scam. In practice, they can be encountered in the online environment, when the fraudster uses third parties without their knowledge to carry out the fraud. It depends on the scheme in which the fraud is carried out. Currently, there are already cases when a person has practically no chance to find out that he is a victim of fraud. They differ from common types of fraud in their sophistication and insidiousness. However, the essence remains the same - misleading the victim with the aim of enticing financial gain. In short, the essence of triangle fraud is that the perpetrator receives goods for which a third party pays.

How does it work in practice?

Imagine how you sell a new or used thing over the Internet. You want to be sure of payment, so you request payment in advance by bank transfer through one of the payment systems. You are contacted by a fraudster who pretends to be interested in the purchase and asks you to hand over the item to his friend who is located at your place of residence after payment. After crediting the purchase price to your account, you confirm receipt of payment to the fraudster, aka the buyer, and agree on a date for handing over the item. Afterwards, you hand over the item to a person who introduces himself as a friend who came to pick up the item.

Until this moment, the transaction looks like a normal sale of an item over the Internet. In principle, there is nothing unusual or suspicious about her. But the situation becomes more complicated when a third party contacts you saying that the thing they paid for has not been delivered to them. You will, of course, defend yourself by saying that you handed over the thing to your friend in accordance with the agreement, and if he didn't hand over the thing, then the third person should contact him. However, the third person claims that she did not send anyone for the item, but you should have mailed the item to her address.

Does this mean that my data must have been misused?

Yes, this type of fraud is based on the misuse of personal data. The thing you are advertising can be advertised by a fraudster on another portal at the same time without your knowledge. The fraudster will be contacted by a genuine interested party, to whom the fraudster will provide your personal data and the account number for payment of the purchase price, which you provided when the fraudster contacted you about your ad. Just like you, the real prospect has no idea that he is the victim of a scam. The genuine interested party subsequently demands from you the delivery of the item, which you can no longer deliver to him, as you have already handed it over to the fraudster's friend.

How can this situation be resolved?

Although at first glance you are not the one who is damaged, because you have the money for the thing, in reality this is not the case. You must return the received money to the genuine applicant. Otherwise, it would be unjust enrichment on your part.

So the result is that the genuine buyer will get their money back, but will not have the thing they wanted to buy. You will have neither the thing you wanted to sell nor the money. The scammer will have your thing, but he never wanted to pay you for it. It is likely that you handed over the sold item directly to the fraudster and not to his friend.

What warning signs should buyers and sellers look out for when transacting online?

Online fraud is becoming more and more sophisticated and difficult to detect, it is always necessary to pay attention to at least the data that is available to us.

Caution should be increased with freemail addresses, where it is not necessary to provide real personal data. It is also necessary to be careful about phone numbers from abroad. A warning can also be the price of the item offered by the fraudster, which is often significantly lower than in standard sales. It is a good idea to check the data after receiving the purchase price and before handing over the item, whether they match, e.g. with an e-mail address, etc. In any case, the risk is represented by payment systems that do not require payment authentication. It is simply advisable to minimize the risk of fraud by comparing the various available information.

How can banks or financial institutions help prevent and detect triangle fraud?

Banks and financial institutions have direct access to both financial data and the transactions themselves. A welcome step forward is the gradual introduction of two-factor authentication of the payment provider, or the use of verification systems such as 3D Secure, which require additional verification before the transaction is executed.

Detecting a triangle fraud at its very beginning is very difficult, and it is usually discovered only when it is already too late and the fraudster is essentially impossible to trace. However, banks and financial institutions should (and still do) inform the law enforcement authorities about suspicious transactions, as well as merchants who, together with customers, may suffer damage from this type of fraud.

What steps can we take if we fall victim to a triangle scam?

Since triangle fraud is primarily based on the misuse of personal and payment data, in case of suspicion it is advisable to immediately contact your bank or payment system operator and try to cancel payments or block your payment card. It is also a good solution to contact the internet platform on which the fraudster advertises the goods. Last but not least, the victim of such fraud can be advised to contact the law enforcement authorities and file a criminal complaint if, considering the amount of damage, it could be a criminal act.

Is it possible to claim damages?

Yes, the injured party can do so either directly in criminal proceedings or through a civil action for damages, or by a lawsuit for the issuance of unjust enrichment. However, relying on the fact that I will recover the damage is wrong. The basis must be prevention and vigilance of people entering into relationships in the online space.

How often can you encounter the triangle fraud in practice?

The described triangle fraud can be described as "new on the market". This type of fraud is spreading mainly in Western countries in direct proportion to the increase in popularity of various payment systems or cryptocurrencies. There, after the first cases, the police started educating the population.

In practice, the police will encounter this problem rather than us lawyers. The problem with this type of fraud is often the amount of damage on the part of the victim. It may be subjectively perceived by the injured party as significant, but if we imagine what costs the injured party will have to spend to recover it, the injured party would rather not even recover it and leave it at that. In this way, the injured party will suffer not only property damage, but also moral damage. He will be left with a feeling of guilt for allowing himself to be deceived in this way, or of helplessness, since there is little chance that the perpetrator will be punished. That is why the vigilance and prevention of those who enter into various relationships in the online space is of primary importance.