Ecommerce Toronto Meetup #11 – Fraud

Posted on February 2, 2012 by Brendan Soucie | View Comments

Here are some of the notes taken from our last eCommerce Toronto meetup on Fraud

Offline Fraud

On the payment processing side
Credit Card Fraud
Counterfeit Bills

Online Fraud

Higher ticketed items are more susceptible to fraud
Flipping Product – Buy from Snuggle, sell on Ebay, Kijiji, Craigslist
Fraud charges – The merchant never wins

Billing address vs Shipping address

Not all transactions match
Gift items -- Customers have items shipped to a different location
Supplement subscriptions – goods have to be shipped directly to the customer, no match, no shipment
Online carts and platforms have built in address verification systems (AVS) which processing companies can then restrict which orders can be processed or rejected.

Technology

Chip technology
PIN protection – implemented in Stores. How do you make the transition online?

Customer Credit Card Protection

The Merchant Never get dings
Manual Approving transactions

Where do you see the most Fraud?

We asked eCommerce merchants this question, and the answers the majority gave was Toronto and Montreal. This areas may not apply to all retailers and credit card holders because fraud is everywhere and differs from location to location.

Fraud in the U.S

Fraud is very big in the States.
Cards across borders get flagged in an attempt to minimize the amount of fraud between Canada and the U.S.
So frequent, fraud agencies (FBI) don’t bother with certain fraud amounts

Credit Card Specifications

Address 1 failure
If the billing and shipping address do not match, many retailers and eCommerce merchants will reject the transaction

Risk Management

Reverse lookup phone number to match the address
Make sure the address matches
Use the telephone – Fraud numbers don’t exist (pay as you go, number keeps ringing)

How many people do you have manage risk?