Report: Data Sharing Must Be in Real-Time to Prevent More Fraud

Feb. 14, 2011

10 percent of the credit cards used to commit e-commerce fraud, were utilized at more than one merchant, according to a new study commissioned by anti-fraud collaborative Ethoca. In addition to that statistic, Fraud Attacks Across Industries reveals the frequency with which fraudsters strike multiple merchants, the speed at which fraudsters change attack paths, and surprising information on which industries are key targets. The Dublin-based company studied 95 merchants enrolled in its Issuer Confirmed Fraud Alerts service from June 2010 through October 2010. The study also revealed that when a fraudster commits fraud at multiple e-commerce merchants, the victimized merchants do not typically all belong to the same industry or vertical and in 86 percent of the cases studied, the fraudster stopped using the cards during the first 24 hours. “Our research shows not only the importance of sharing data, but how quickly it needs to be shared in order to be effective, and what kind of difference it makes to share it across industries,” said Dr. Daniele Micci-Barreca, principal at Elite Analytics and co-author of the report. “Merchants who share data should do so in real-time or near real-time. With speed, digital goods and services can be shut down before the thief is able to get or use them. Also, the general belief among online merchants and fraud fighters had been that sharing among industry peers mattered a great deal. The study shows that’s wrong. It is more effective to share data outside an industry.”