Fraud is prevalent in all Internet transactions, especially when the product is intangible. We have been in this industry long enough to see significant growth and development. We have also been here to see the growth and development of fraudulent activity. We would like to remind you that it is important to utilize 2Checkout’s fraud review. We have the advantage of state-of-the-art software and a knowledgeable staff with 35 years collective experience. In addition to our fraud review, we encourage you to utilize the information made available to you in the vendor administration area. We would like to give you some tips on how to recognize legitimate orders while preventing fraud.

While it is important to mitigate fraud, you want to be sure that you are not inadvertently denying legitimate business. With the current credit card system in place, we are not as protected as a traditional retailer is. Because we are working in a “Card Not Present” environment, chargebacks will occur. We have found on average, 12% of your orders may appear to be suspicious, but only 1% will end up being fraudulent. It is very important that you don’t insult the 11% legitimate customers just to catch the 1% fraudulent customers. While working with digital products, losses are less formidable because there are no shipping fees and no items to be lost. The following information will help you to differentiate between legitimate customers and fraudsters.

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One of the more challenging issues we have to work around involves new vendors. While we do have a wealth of knowledge and experience relating to the various types of fraud, it can prove somewhat more problematic to link this knowledge with a new vendor. First, we must understand our vendor and the aspects of their business that may be at risk of fraudulent activity.

Types of customers and fraud:

With all new vendors, we must start from the ground up. From the moment our partnership begins, we attempt to assess what types of customers our vendors will be receiving. For the purpose of this study, we reviewed one of our new vendors and will now refer to them as “Supplier A“. In the case of Supplier A, several discrepancies were located in each order placed through their system. We noticed discrepancies between the billing information and the IP addresses, as well as discrepancies within our internal tools. While not unusual to find orders with these types of discrepancies, we did find that each new order placed had very similar discrepancies. This made it appear that the same person or group was attempting to circumvent the fraud review process and get by undetected. When we noticed such a large percent of Supplier A’s orders with these same discrepancies we then proceeded to take a higher level of caution with all new orders reviewed. It appeared that the trends changed slightly, receiving orders with matching billing addresses and IP addresses but suspicious email addresses as well as substantial and consistent discrepancies within our internal tools. This may have been the work of the same person or fraud ring placing the original orders, but it is also possible that the vendor was being hit by other fraudsters.

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2Checkout and our Fraud Prevention Department are pleased to announce an improvement made to our services today. Beginning earlier this afternoon vendors are now receiving the fraud review notifications at a quicker response rate then they were previously.

Prior to today, 2CO vendors were receiving review notifications within an hour or two of the order being placed. Now, vendors should see this response time reduced by at least half.

This feature enhancement should benefit those of you selling immediate downloads and services as your customers will experience fulfillment rate that has been improved from hour or more, to within the hour. Or even as quickly as within 20 to 30 minutes.

Quicker notifications should result in a quicker turn-around on order processing benefiting both you and your customers.

Do you have big celebratory plans for International Fraud Awareness Week? What do you mean — NO? Don’t worry, we’ve got you covered!

As you know, 2Checkout takes e-commerce fraud management very seriously and accurate and timely protection of your orders has always been a guarantee. But this week, to celebrate Fraud Week, we made our net even stronger.

2Checkout joined a global fraud-fighting community, powered by Ethoca – a leader in collaborative fraud management – to extend our fraud management services beyond our current system. Now, we have access to shared fraud data from a pool of online retailers designed to help augment our efforts in spotting and stopping fraudulent online behavior more efficiently, and guaranteeing less chargebacks related to fraud.

In partnership with our existing fraud detection technology, Ethoca will be an added layer of protection. The beauty of the system is that it not only red flags and records fraudulent findings from other retail sources but also helps identify honest customers as well, so they can receive a virtual “speed pass” through the clearance process and valuable departmental resources can remain focused on stopping criminal activity.

According to Sebbe Jones, Manager of Fraud Protection for 2Checkout, “Fraud protection isn’t just about stopping the bad guys. Providing a seamless and safe shopping experience for the legitimate consumer is equally, if not more important. Ethoca is yet another layer of security for us to ensure a safe shopping experience.”

We are proud to be an integral part of Ethoca’s network and are confident the model will help stamp out fraudulent transactions within the retail industry, resulting in substantial savings for customers and retailers selling online.

This is always a hot topic.

It is definitely exciting to be getting such great input through the new 2Checkout forum.

Topics like consumer fraud will be introduced, covered, reintroduced and covered again and again. The short (and often unacceptable answer) is that there really isn’t an ideal solution for the card-not-present merchant of today regardless of product type: tangible or intangible.

Why not? There are two big reasons:

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