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Protecting retail stores from online fraud

Online fraud is much closer to home than retailers might think, and can be any purchase value made by any purchase method, and much of it originates from legitimate but dishonest buyers,” Buxton says.

He says many retailers rely on simply blacklisting credit cards which have been proven fraudulent or manually reviewing orders, but these methods fail to capture “friendly fraud” where customers are using their own cards.

Friendly fraud behavior is aimed at securing a refund from their credit card company, and can include: disputing that the goods were received; claiming they never ordered the goods, or that the goods were faulty.

Risk Management Profiler works by automating risk analysis of online orders. It can be configured to suit individual merchants’ risk profiles, and uses patterns and analysis gained from eStar’s 12 years of ecommerce fraud data.

The risk metrics Risk Management Profiler applies include:

•          Known fraudulent addresses.

•          Data consistency analysis.

•          Order velocity and value, and customer behaviour.

•          Payment data validation and comparison.

•          Address validation.

•          Related orders and fuzzy pattern matching.

It was developed with funding from Callaghan Innovation.

eStar claims its clients who use the tool have seen fraud rates of between 0.2-0.5 percent, in comparison to a global average of 1 percent.

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