Are You Winning the War on Fraud?

Are You Winning the War on Global Fraud?

There is a global war on fraud…A war you need to win. Merchants are fighting an increasingly sophisticated army of online thieves.  Yesterday, amateurs hacked scripts.  Today, there are professional, technically equipped and well educated  fraud  networks operating around the world.

You CAN Win your War on Fraud. You win by achieving greater visibility into who is stealing from you – both today and predicatively in the future. You win by improved operational efficiency. You win by gaining the power to control your risk process.   

What to look for in an online fraud service

I. Greater visibility and insight into identifying fraud: 

You can’t stop what you don’t see.  In fraud monitoring nothing is more important than your front end screening process.  Some of the technologies available that give you greater visibility into detecting suspicious orders include:    

1. Order Linking – the ability to link transactions based on direct and indirect relationships to each other.  If you can discern from this analysis that your transaction is linked to other merchants, would you make a different decision?
2. Dynamic Scoring – continuous monitoring of transactions, rather than a one-shot evaluation approach. Imagine knowing that the riskiness of a previous transaction, not yet fulfilled, has risen to a higher level and would now yield a different decision.  How would that help your decisioning process?
3. Device Fingerprinting – unique identification of each device placing online orders.  Would you make a better decision if you knew the current transaction is linked to other orders through a commonly shared device?  Information with linking technology will yield a better, more predictive result.
4. Proxy Piercing –identifies the true geo-location of the device placing the order, even if the controlling person is using a proxy to hide their location.
5. Cross Merchant Data Leverage – leverages data from other merchants in real time to identify fraud patterns and suspect transactions.  Think of this as knowing the previous path of a shoplifter through the local mall, BEFORE they come to your store.
6. Affiliate Fraud Detection –A fraud tool set specifically aimed at the prevention of affiliate related fraud schemes. 

II. Greater Operational Efficiencies

Operational efficiency is being more effective with fewer resources.  In the context of “Winning the war on fraud” it means accurately and instantly making transaction approval and decline decisions at the point of purchase, thereby minimizing manual reviews.  In addition, operational efficiency means streamlining the manual review process.  You should look for a service that gives you operational efficiency by conserving your operational resources without sacrificing sales or control of your fraud risk exposure. 

Manual Review Reduction

1. What would it mean to your organization if you were able to reduce manual reviewed orders by 50%?  Such efficiency lowers your costs and makes your checkout process more customer-friendly. 
2. Would it be helpful to automate your manual review process? Manual reviews can be one of the most time consuming and expensive  tasks of a fraud analysts’ job?  Many merchants review too many orders as a result of inadequate fraud screening tools at the time of the transaction. 

Better information and better screening will result in fewer orders manually reviewed, which results in better fraud detection.

III. Power to control the risk management process

Winning the war on fraud means you must maintain control of the entire risk management process. To achieve this power and control consider the following attributes of a good fraud management service.  Your fraud team should be able to write custom rules that align with your business and risk philosophy. For example, can you point-and-click to create a rule that can exclude all orders from devices originating in Russia?  Can you set a chargeback target to help maximize your sales?  Can you set a target for your manual review rate? 

All of this should be under your control through a good risk management program. 

1. Your fraud strategy

• Customize your fraud rules
• Align with your business model
• Adjust rules for seasonality/time/dates
• Utilize shopping cart data to make better decisions

2.   Control organization expenses

• Chargeback alignment with your sales and risk management strategy
• Screen the right orders that exhibit suspicious behavior
• Better trained agents, with more information, make better decisions

3.       Workflow process

• Adjust workflow metrics to fit the problem
• Attain greater control over the decisions made by your review agents

There are many fraud tools and approaches available to merchants today.  Carefully considering the above approach will increase the odds in your favor that You Can Win the War on Fraud.

Please contact me, David.Walker@kount.com, to learn more or online at www.Kount.com