How WireCash Manages Fraud and Found Success Underwriting Digital Money Transfers to High Risk Markets

How well would your fraud management program perform if your organization depended on it for doing business with customers from countries like Ukraine and Nigeria? Now what if we said your business was facilitating money remittances to these countries? WireCash is doing just that, and we sought to uncover how this could be possible by talking directly with the company that found success at the intersection of one of the highest risk industries and some of the highest risk countries in terms of online fraud.

The use of custom modeling and risk analytics also allows WireCash to be more consumer-friendly than they were in their ATMCash days, and compared to most online MSBs. While WireCash may sometimes require strong authentication or verification techniques, they try to eliminate the need for this and reduce friction for most new customers through use of risk modeling and amassing many neutral or low risk signals. They have also leveraged this experience and insight to enter new markets where others wouldn’t go or would only tread lightly. WireCash today helps consumers send money to Nigeria, Ukraine, Russia, Armenia and other countries that present high risk. Money Service Businesses providing remittances to these countries have tended to offer limited services or maintain several day waiting periods.

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Post-EMV eCommerce Fraud Growth Abetted by Data Breaches

According to recent data from Experian, eCommerce fraud was 15 percent higher in the first half of 2016 compared the same period the year before, but for the full-year eCommerce fraud attack rates increased to 33 percent. This implies an even greater increase in CNP fraud in the second half of the year, and it is believed that the transition to EMV or chip cards is the primary reason behind this growth.

In the United States, the EMV liability shift occurred on October 1, 2015 and the rollout has been gradual. Likewise, the increase in CNP fraud was notable but in-line with recent years’ growth. By the end of 2016, nearly 2 million U.S. merchant locations were equipped to accept EMV cards, or 39 percent of all merchant locations, according to Visa. It was in 2016, and seemingly more so in the second half of the year, that the industry really started to experience the shift of more fraud attempts to the customer not present channel.

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CNP Fraud on UK Cards Up 23 Percent in First Half of 2014, Compared to 4 Percent Increase in Counterfeit Card Fraud

The latest figures on card fraud losses in the United Kingdom, coming from industry group Financial Fraud Action UK, support the expectations of most industry experts that when EMV rolls out in the United States it will have a positive impact on deterring counterfeit cards and fraud at the point-of-sale, but lead to more fraud attempts and losses in the Card Not Present channel. In short, CNP fraud is up nearly 25 percent, fraud on contactless card payments is negligible, and a slight increase in counterfeit card fraud is attributed to UK-issued cards being counterfeited and used in nations that have not yet implemented Chip & PIN / EMV.

According to Financial Fraud Action (FFA) UK, an industry group that works in partnership with The UK Cards Association, fraud losses from CNP purchases on UK issued cards in the first six months of 2014 totaled £174.5 million, a 23 percent increase from the first six months of 2013. Excluding mail order and telephone order (MOTO) transactions and focusing on eCommerce, losses between January and June 2014 on UK-issued cards reached £110 million, also a 23 percent increase from the first six months of 2013. Total online shopping increased from 2013 to 2014 over this time period as well, but by only by 16 percent, reaching £47 billion.

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DOJ to Congress: Amend Laws to Help us Prosecute for Overseas Fraud on U.S. Cards

While there have been many successful efforts to bring international fraudsters to justice in U.S. courts, this often requires cooperation from other nations. To make prosecution efforts easier against international fraudsters the U.S. Department of Justice is asking Congress for help, requesting amendments to existing law so that it is illegal to possess, use, buy or sell any stolen credit card that was issued in the United States, regardless of the fraudster’s physical location at the time when the theft or transaction occurs.

The Justice Department says that new or updated laws are needed as there are fraudsters and criminal organizations operating overseas and committing widespread fraud against payment cards issued in the United States. Often because the fraudster is never on U.S. soil, current laws in the way they are written can make prosecution difficult or not possible. Existing laws cover events such as someone abroad hacking into a U.S. computer, stolen cards used or possessed inside the U.S. and money transfers into the United States. However, being in possession of stolen cards outside of the U.S. and using them from outside of the U.S. are not enough for prosecution alone.

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250 million stolen credit cards for sale online

According to estimates from fraud prevention startup Trustev, there are 250 million compromised payment card numbers for sale in the online black market. The ease with which fraudsters can obtain this information emphasizes the importance of being able to effectively authenticate and verify identity information provided online.

Trustev, an Ireland based startup and fraud prevention vendor, released a Global Fraud Monthly Threat Briefing for the month of April. In addition to finding that there are currently more than 250 million stolen credit cards for sale online, the briefing included several interesting fraud statistics based on Trustev’s client base of over 100 customers based on activity seen during March.

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Fraud Patterns and Statistics from this Black Friday and Cyber Monday

While eCommerce and mobile payment volumes hit record levels on Black Friday and Cyber Monday, the fraudsters were seizing the opportunity to attack. This included increased fraud attempts from mobile devices and higher average order values for fraudulent purchase attempts.

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Register for Online Training Programs Before October Price Adjustments

On October 1st The Fraud Practice will be increasing the enrollment prices of our online training programs across the board. If there are courses or Career Tracks that you’ve been considering for yourself or for staff, register by the end of September to enjoy the current low prices.

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