What can happen if proper fraud monitoring procedures are not established?

If proper fraud monitoring procedures are not established, one of the primary consequences is that fines or monetary losses may occur due to suspicious transactions. Inadequate fraud monitoring can lead to undetected fraudulent activities, potentially resulting in significant financial losses for the organization. This could arise from chargebacks, penalties from banking institutions, or even legal fees associated with fraud investigations.

Furthermore, a lack of effective monitoring allows fraudulent transactions to go unnoticed, which could lead to losses that accumulate over time. Companies may also face regulatory fines if they fail to comply with standards and practices designed to protect consumers and secure transactions. Thus, failing to implement robust fraud monitoring measures can have dire financial implications, making it crucial for businesses to proactively safeguard their operations against fraud.