eCommerce Fraud - Articles - Zimbio

Welcome to our wikizine called "eCommerce Fraud"

Tue, 30 Apr 2008 22:20:46 GMT

posted by davidamontague
Wikizines are interactive magazines that anyone can create or edit - and this one is called "eCommerce Fraud". Here you can find fresh voices and respond in real time. Some members write articles about recent news and trends related to the wikizine's topic, others recount relevant personal stories or share their favorite pictures and video clips. Got an interesting idea or story to share with other members of this wikizine? Well, then put on your journalist's cap and add your own article!

Telephone Verification

Tue, 30 Apr 2008 21:37:00 GMT

posted by davidamontague
A practical means of verification ...

Telephone verification is the process of calling back a consumer at the phone number they have provided, in order to verify the phone is working and the person in possession of the phone is the one placing the order.

How Good Is It?

Typically phone verification is used in manual reviews to do one more verification of a consumer’s address and phone information when AVS is not a full match. But some merchants are using automated telephone verification services to ensure they have a valid phone number for each customer. The process is simple, and while requiring a little more user interaction, it fits easily into the online real time process.

NOTE: This has been a popular technique for businesses that are involved with paying out money.

“Gotchas” with phone verification include:

Don't forget to do simple phone standardization and checking to prevent wasted verification attempts.
If you don't do authentication of a phone number before you verify it, than your verification loses a lot of strength. There are two levels of authentication, phone type and phone to name/address.
This can get expensive if you are doing international business.
This process does require a change to the user experience.
Don't forget to perform other redundant checks to catch unwanted behavior.

You can read more at our Fraud Practice Library: http://www.fraudpractice.com/gl-phoneverify.html

Common Fraud Schemes

Wed, 1 May 2008 03:27:50 GMT

posted by davidamontague
I have been working with merchants for years, and I am still amazed at the creativity fraudsters come up with to defraud merchants. These people aren’t stupid, uneducated thugs. They are educated, crafty and patient.

If there is one thing I have learned from my experiences, I know that even if you wanted to, it is not realistic to think you can stop all fraud. There are just too many ways to create a perfect one-use identity. The resources, time, money and people I would have to put into place to catch these fraudsters just don’t make sense.
But the good news is you don’t have to catch the perfect one-use criminal. The majority of fraudsters out there are still using the basic scams to de-fraud merchants because there are still too many businesses that aren’t doing anything to stop them.
The purpose of this section is to give you an understanding of some of the general schemes that are out there. With this understanding you can look at your businesses and craft strategies to prevent fraud that most closely represents the type of fraud scheme your site sees.

You can read more on this article in our Fraud Library. http://www.fraudpractice.com/FL-FraudScheme.html

Requiring CVV will drop sales conversion 40%???

Wed, 1 May 2008 20:48:00 GMT

posted by davidamontague
I have to say up front that I actually find this hard to believe, and I cannot say I have ever seen or heard this from sites I was working with. According to the eCommerce Checkout Report, conducted by Elastic Path, and presented by Jason Billingsley, on the Internet's Top 100 Online Retailers merchants, merchants that did not make the card security code entry required were able to achieve a 40% higher conversion rate.

You can read more on this article in our Fraud Library. http://www.fraudpractice.com/Article1021.html

You can find the Elastic Path webinar at the getelastic blog link provided below, I do recommend it. The eCommerce Checkout Report is from Elastic Path and was done in 2007. The main subject of the report was "These are a few of the 23 tactics we evaluated as we studied the checkout process of the Internet’s Top 100 Online Retailers." http://www.getelastic.com/ecommerce-checkout-report/

Manual Reviews

Tue, 30 Apr 2008 21:29:00 GMT

posted by davidamontague
Not always a bad thing ...

Manual review is a technique in which merchants use staff members to perform manual checks on orders to determine which orders are fraudulent.

How Good Is It?
In general, this is not a very good fraud-prevention technique. The quality and effectiveness of manual reviews is directly proportional to the knowledge and experience of the review staff, and the tools and process that they have established to perform manual reviews.

You can read the full article at: http://www.fraudpractice.com/gl-manual.html