Welcome to The Fraud Practice’s FraudBlog; your source for updates on current events, commentary and best practices related to the eCommerce CNP payments and fraud industry.
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As fraud professionals, it’s natural to focus on preventing fraud losses, but this often comes at the detriment of sales conversion. The nature of model-based risk management platforms and machine learning model training has this bias as well, mainly as a result of the fact that it is much easier to recognize missed fraud than it is to recognize sales insults.
How do we address this?
Credit Bureau and fraud prevention services provider TransUnion announced plans to acquire IP geolocation and identity reverse lookup provider Neustar for $3.1 billion in an all cash deal.
The Buy Now, Pay Later (BNPL) alternative payment method is the hottest trend in payments right now. Amazon announced a major partnership with Affirm, Square will acquire Australian BNPL provider AfterPay, and now PayPal will acquire Paidy for $2.7 billion. All of this activity occurred in about a 40 day span.
According to a recent study, eCommerce merchants in the US have experienced a 140 percent increase in fraud attacks relative to 2020, while every dollar associated with missed fraud costs organizations $3.60 on average, up 15 percent from before the pandemic.
Fraud and risk management strategies tend to focus so much on automated risk decisioning that improving manual review performance is often an afterthought. Consider the cost savings and increased revenue an organization could realize by cutting average order review times while also reducing sales insults and missed fraud on reviewed orders. This is why improving performance of manual reviews is at least equally important as efforts to reduce order review rates.
Here are 5 tips to increase speed and performance with manual review.
It is understood that manual order reviews are a critical component of fraud prevention strategies, but like risk strategies overall, manual reviews tend to focus on third party fraud and often neglect other forms of fraud and abuse. The harsh reality is that fraud is a broader problem than identity and third party payment fraud. Since the onset of the pandemic, other forms of fraud, such as refund and promotion abuse, have increased. Manual reviews need to broaden the scope accordingly.
Default settings in Microsoft’s Power Apps portal left 38 million records exposed across more than 1,000 web apps, impacting state government agencies, American Airlines, Ford and others. The exposed records varied by organization and web app but included address, phone numbers, COVID-19 vaccination records, employee and applicant databases to include Social Security numbers.
This white paper examines the trends and common themes associated with merchants who thrived versus merely survived 2020 and the lasting changes on eCommerce and omni-channel retail. This includes a look at differences in risk management strategy architecture, readiness to scale and effective communication between the digital and physical worlds to support a true Unified Commerce strategy.
Download your free copy of this new white paper.
T-Mobile is currently investigating the extent of a data breach before officially disclosing the number of customers impacted. This follows news first reported from Vice.com that the personally identifiable information of 100 million people was for sale on the darkweb, with the data coming from T-Mobile. According to the hacker selling the data, it includes 30 million unique Social Security Numbers.
Model-Based Fraud Scoring is a technique used by merchants to predetermine the level of risk involved with an order in a card-not-present transaction.