August 24, 2016
CNP Expo: The Constant Evolution of Fraud
May 19, 2015
Fraud attack methods are constantly changing and evolving. However, according to panelists at a Tuesday afternoon CNP Expo session, the evolution of fraud has followed the evolution of e-commerce.
“What’s really changed is the digitalization of many services: e-tickets, gift cards, etc.,” said Chris Uriarte, chief payments and product officer with Vesta. The speed of filling digital orders contributes to lost revenue through fraud. “Manual review gets thrown out the window because you don’t have time,” he said. “It’s fast fraud. Fraudsters hit the retailer and turn it around very quickly.”
While new fraud methods continue to proliferate, tried and true techniques—like creating an order and redirecting it to another person—are still lining fraudsters’ pockets.
“Most of the carriers figured this out,” said Jamon Whitehead, manager of risk and payment operations for outdoor apparel retailer Backcountry.com. In 2014, however, the retailer saw a number of redirects from old accounts. A new address on an old account was the tipoff and the merchant found a way to stop the fraudsters. Getting more information about your customers can help detect fraud but as fraud evolves, antifraud technology and techniques must evolve as well.
“The key thing everyone is still concerned about is the use of stolen credit cards online,” said Dr. Stephen Topliss, vice president of services and support for ThreatMetrix. “The techniques we’ve used in the past have become less effective. More fraud is getting through.”