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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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Three Core Considerations for Evaluating Model-Based Fraud Scoring Providers

Whether in the market to move from legacy fraud prevention systems to a model-based strategy or looking to assess a current modeling-based solution provider, organizations should consider the following factors when evaluating the capabilities and strengths of prospective or incumbent model-based fraud scoring providers.

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Holiday Shopping Pulled Forward While Online Shopping Surge Continues

Cyber Monday 2020 was the largest online shopping day in US history reaching $10.8 billion, but that superlative will likely be replaced this year as over $12.1 billion is forecasted for US online sales on Cyber Monday in 2021. As eCommerce holiday sales continue to surge, they are also pulled forward and spread out by consumers, worried about supply chain issues, beginning their holiday shopping earlier than usual. Nearly one-third of consumers plan to begin their holiday season shopping in the month of October. The question for online retailers is what does this mean for fraud and risk management during the holiday shopping months, which tend to be the most lucrative for merchants and fraudsters alike?  

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White Hats Beware: US Governor Calls for Investigation Against Journalist Who Properly Reported Data Security Vulnerability

A web app for Missouri’s Department of Education exposed around 100,000 Social Security Numbers when a web user viewed source code on the web page. Reporters notified the state’s Department of Education to fix the issue before publishing a news story. In response, Missouri’s Governor issued stern statements about initiating investigations with prosecutors, drawing ridicule on Twitter as well as other social media platforms and websites.

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Feature Article: Maximizing Machine Learning Model Performance and Shelf-Life

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?

PayPal to Acquire Paidy, Japanese Buy Now Pay Later Company

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.

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Fraud Attacks, Losses and True Cost of Fraud All Increased in 2021

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.

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Five Tips for Increasing Speed and Performance with Manual Reviews

 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.

Order Risk Reviews Should Also Focus on Friendly Fraud, Refund Fraud and Abuse

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.

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38 Million Record Data Leak Serves as Reminder to Check All Cloud Database Configuration Settings

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.

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