CNP Expo: Socially Unacceptable

May 21, 2014

CNP Expo: Socially Unacceptable All fraud is social in the sense that it affects others, but this afternoon’s social fraud session focused on the role of social media in fraud and fraud prevention. Moderator Ryan Wilk of StubHub began by observing that “good consumer experience trumps all in the e-commerce world, but the challenge is to distinguish the good customers from the bad.”

“You have to be able to leverage data fragments and bread crumbs you have collected about this customer to establish their identity,” explained Stephen Ufford of Trulioo. “Then you can focus your energy, time and tools on those identities that aren’t established. And either you have them jump through more hoops, or you stop that transaction.”

Trulioo uses behavioral analytics to piece together what Ufford called a customer’s “cyberidentity”—their social media behavior and behavior across other e-commerce sites. He cautions that looking at social media profiles isn’t enough on its own—“you have to look at the other pieces of data you have based on this person’s e-commerce data, geodata tied to email addresses. When that is all put together, it can create a context and give you a powerful tool for fraud prevention.”

Jim Houlihan of Orbitz explained that they see a lot of fraudulent third-party ticket purchases, where a scammer books multiple tickets on a stolen credit card, one for the cardholder and the rest for themselves and their friends. The cardholder then just doesn’t show up for the flight. To prevent this, Orbitz examines customers’ social media profiles to try to verify the relationships among people who book together.

Houlihan describes their system in terms of green, yellow and red rules for different customers or devices. Green is the least stringent, for regular customers booking from known devices. Yellow is neutral, for new customers or a new device. These customers are required to sign in to verify their identity. Red is for a known bad device or card. Says Houlihan, “We don’t turn red customers away; we still ask them to sign in so you can see if they have phished our customers or accessed their account, and then we can contact that customer and have a good customer service moment while shutting that fraudster down.”

Dan Elvester of Experian emphasized the importance of making social fraud detection frictionless to give good customers a good experience. He also pointed out that “consumers appreciate that kind of security, because they are concerned about fraud as well.”