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Bust-Out
Bust-out is a type of credit card fraud where a fraudster applies for a credit card, builds a positive credit history over time, and then maxes out the credit limit with no intention of repaying the debt. This often involves making minimum payments initially to avoid suspicion and then suddenly accumulating large balances before disappearing or “busting out.”
Bust-out fraud can lead to significant financial losses for businesses. Fraudsters take advantage of the trust established through good credit behavior before abruptly exploiting the system. Detecting bust-out fraud requires monitoring for unusual spending patterns, sudden changes in payment behavior, and other anomalies that may indicate fraudulent intent.
Effective prevention strategies include using advanced analytics, real-time monitoring, and machine learning to identify and mitigate potential bust-out fraud before it results in substantial losses.
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