CNP Expo: E-Commerce Fraud is Bad and Getting Worse
May 21, 2014
You know it’s bad when even an Irishman can’t come up with a joke. Dublin-based Ronan Gallagher, head of product development for Alpha Payments Cloud, started this afternoon’s e-commerce fraud session by saying he couldn’t find a single joke about credit-card fraud to open with. But though e-commerce fraud is a serious problem, it is not entirely hopeless. The panel offered several methods and techniques to control fraud.
Duane Burcham, a sales and business development executive for iovation remarked that “any good fraud prevention arsenal has to address the three components of fraud—the fraudster, the payment method, and the device they use to connect to your site.”
He highlighted the importance of device fingerprinting in stopping scammers. E-commerce fraud, after all, isn’t necessarily credit card fraud. With ticket scalping, for instance, the transactions are legitimate, but the buyer is then illegally reselling those tickets at a high price. Preventing that requires the ticket merchant to figure out which devices they should block.
The panel also warned that we shouldn’t expect that fraudsters are going to retire when EMV is implemented. “Fraudsters have to make a living,” said John Dancu, president and CEO of IDology. “We should expect that they will find the soft spots in EMV, too.” Priya Dozier of FIS suggested that companies start gearing up for the transition now so that they can be proactive in stopping the scammers.
Dozier also recommended that as mobile becomes more popular, merchants developing their own apps should do so with fraud prevention in mind: “Merchants should look into what data they can get to verify the mobile user’s identity and payment information. Pull the phone number and compare it to what the customer enters, or see what information you can get from the mobile phone company. You can also find out if the phone has been reported stolen recently. All of that can help you fight mobile fraud.”