One of the most talked about subjects in sessions, hallways and over cocktails at the recent CNP Expo in Orlando, Fla., was false positives. Discussion centered primarily on how to measure and prevent negative impacts on legitimate customers from companies just trying their best to prevent fraud. Several CNP merchants offered best practices to help industry professionals with similar pain points.
In the last few years, the focus of fraud managers has shifted. More advanced fraud prevention systems have left many companies feeling confident they are preventing more fraud. They wonder, however, how many legitimate customers are being wrongfully declined by those systems. Over the years, the behavior of fraudsters has evolved to look more legitimate. At the same time, there always will be real customers using their own cards for orders that appear risky. Some fraud orders successfully get past review while some legitimate sales are held for several hours or canceled all together. Beyond the loss of the immediate sale, this also can impact customer retention. Customers that have an order delayed or canceled by the merchant due to suspicion of fraud may never return to that site. As one speaker stated at the CNP Expo: “When you cancel a good order, you are essentially referring that customer to your competitor.”
Identifying the Impact of False Positives on Your Business
The biggest challenge presented by false positives is
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