Fraud Awareness Week is every week at a successful e-commerce company. 2Checkout is not only aware of, but deeply invested in, mitigating risk on many levels. A few of those levels have been defined in this week’s articles. Many of you know that 2CO keeps our fraud detection and prevention methods necessarily quiet. This week we have opened the vault a little, although we only scratched the surface of the types of fraud we see every single day and the ways we monitor and mitigate the risk to our supplier base.

With the recent state of the world’s economy, the industry is seeing an increase in fraud . Traditional fraud methods continue to be prevalent but there is also an increase in “friendly fraud”. With the Holiday Season in full bloom, fraudulent activity will be more apparent now than ever.

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Situation:

A vendor selling PC to Phone services was being targeted by a fraud ring. This type of fraud is very tricky to catch. The orders appeared to look legitimate. The card BIN, billing addresses and I.P. addresses all matched. What tipped off the fraud analyst to further investigate this, was the spelling of the customers’ names, name placement, and the frequency of the orders. Most orders had a French I.P. address, but there was one with the I.P. of Côte d’Ivoire. This one mistake led us to believe this was fraud coming out of Ghana. Using some deeper methods of fraud detection such as Device Identification, we were able to connect the orders to each other.

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One of the biggest challenges facing online (card not present) merchants is “Friendly Fraud”. What do we mean by friendly fraud? The standard definition for friendly fraud is when a customer uses a credit card to make a purchase, and then disputes the charge with their credit card company once the item(s) are received. Consumers use friendly fraud to obtain item(s) for free. Friendly fraud can be broken into two categories; deliberate and accidental. Deliberate friendly fraud would fall under the standard definition of friendly fraud. Where accidental friendly fraud can occur when a customer doesn’t realize what a charge is for.

All types of e-commerce companies have dealt with friendly fraud at one time or another. Within the past few years there has been an increase in deliberate friendly fraud. There are a few factors that have contributed to the rise in deliberate friendly fraud; such as the shape of the economy worldwide, individual financial situations, and consumer’s knowledge of how to take advantage of the banking system. Unfortunately, the economy can impact a person’s financial stability which can cause this type of deliberate fraud. What someone can afford today, they may not be able to afford tomorrow. This can lead them to drastic measures to hold on to any funds they have.

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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.