Fighting Fraud

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  • + whatidiscover whatidiscover 5 months ago
    Glad you like it phoenixwei. Credit goes to Kami Boyer. If you are interested in this subject, do update yourself as this slide is more than 2 years old.
  • + phoenixwei phoenixwei 5 months ago
    like the pitch
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Fighting Fraud - Presentation Transcript

  1. Increasing Revenue Reducing Costs Fighting Fraud
  2. Some Key Facts There are 140 billion card transactions p.a. worldwide processes over 14 billion card transactions per year for blue chip clients around the globe processes for many travel & hospitality companies globally is the largest pre-paid gift card issuer in Australia is one of the world’s largest players in transactional card fraud prevention has 19+ years experience in card fraud prevention
  3. Typical Hotel Fraud Patterns Fraudulent bookings are often: Third party purchases E-tickets = increased risk Booked last minute / the e-ticket risk One night stays Cross Border Transactions tickets Use free email domains Multiple bookings on many sites
  4. Hotel Fraudster Characteristics • A majority of the online bookings originate in Florida and California • Fraudsters like to go to holiday destinations – 4 of the top 5 holiday destinations are seaside resorts • Outside of the US, fraudsters are most likely to come from UK, France, Germany, Ghana, India, Italy, Nigeria, South Africa, Spain, Vietnam • When leaving the US, fraudsters like to travel to Australia, Austria, Belgium, France, Germany, Italy, Netherlands, South Africa, Spain and Switzerland
  5. Fraud – Latest Trends - Customer Salutations “Miss” salutations typically 3 times more prone to fraud than “Mr” Typical percentage of transactions that are fraud by passenger salutation Mrs 11% Ms 4% Mr 21% Miss 64%
  6. Hotel Fraud – Latest Trends www.Fraudsters_posing_as_Travel_Agents.con CANADA BOOK NOW, FLY IN 5 DAYS! – Fraudulent travel agency set up online – Genuine customer purchases rooms from fraudulent site – Fraudsters purchase rooms from legitimate companies using card details – Customer is forwarded legitimate booking confirmation – Consumer loses money; brand impact for legitimate travel company; loss of sale of ticket. – Fraudster has card details
  7. Merchants Under Attack - The Real Cost of CNP Fraud Lost sales to fraud Sales blocked to good customers by fraudsters testing cards Rejecting third party sales as risk prone Turning away cross-border transactions from high-risk destinations Rejecting, insulting & losing genuine customers. Lost repeat sales Revenue
  8. Merchants Under Attack - The Real Cost of CNP Fraud Chargebacks, surcharges and fines High manual review costs to minimize fraud Credit card rejection and call centre costs Cost of alternative sales channels Costs
  9. Manual Reviews A Costly Process Online revenue Fraud prevention costs Cost of sale
  10. Draconian Fraud Prevention Solutions Online merchants reject: Fraud accounts for: 8% Domestic transactions 1% - 2% 13% International transactions of all transactions We can improve your revenue by using risk strategies based on our 19+ years of CNP experience
  11. I.P.I.D - Geo Location Real-world location Pre-emptively block web site access to certain locales or IP origination points known to be frequent sources of fraud Instantly compare an online customer's registered address with his real-world location to flag potential fraud
  12. Location details Unusual combinations of location details Billing and/or Delivery address in London I.P. address in California Card issued in Poland
  13. Fraud Patterns: Free Email Accounts john8@hotmail.com john1@hotmail.com john10@hotmail.com john3@hotmail.com john5@hotmail.com john6@hotmail.com john7@hotmail.com john2@hotmail.com john4@hotmail.com john9@hotmail.com John8 John10@hotmail.com John9 John7 John6 John5 John4 John3 John2 John1 John10@hotmail.com 10% fraud rate on free email domains
  14. Fraud Patterns: Tumbling & Swapping
  15. VbV and MC SecureCode • Generically called 3D Secure • Adds a new layer of authentication to an online purchase transaction • Relies on – The merchant implementing new software provided by the acquiring bank – The cardholder signing up for the service with his card issuing bank
  16. Card Scheme Initiatives Latest initiative from Visa and MasterCard • User signs up with their card issuer • At point of purchase, a prompt appears for supported card issuers – Pop-up box or ‘in-line’ • Each time a purchase is made the user enters their password or code • This is checked directly with the issuer, prior to the transaction being sent on line Promises Chargeback Liability Shift
  17. 3D Secure is not a silver bullet Understanding the chargeback liability shift • 3D Secure Doesn’t actually stop the fraud, just shifts the liability – Fraudsters will simply opt not to use 3D secure • Liability moves back to the merchant if fraud levels become excessive – Which they will if there are no other fraud prevention measures • Only protects against a handful of the chargeback reason codes • Only protects web channel – other CNP channels are unprotected Other Considerations • Issuers can deploy more stringent fraud prevention policies, impacting genuine customers • High fraud rates will have a significant negative brand impact • Increase in transaction times – increased consumer drop-out
  18. A Multi-Dimensional Approach to Fraud Prevention Feedback for Rules specific to a on-going development of customer’s business rules and models processes and/or industry Real time ReD PROPRIETARY PROFESSIONAL identification of Industry and customer- consumers’ location EXPERTISE specific databases (Risk Analysts) ReD PROPRIETARY Advanced artificially ReD PROPRIETARY ENGINES intelligent models to detect that detect very specific behaviour and patterns fraud patterns
  19. ReD’s Core Competence Hotels core business = Room bookings ReD’s core business = Fraud prevention With ReD Hotels will: • reduce fraud • increase ticket sales/revenue • reduce costs • Improve the customer’s online experience
  20. Thank you For additional questions email Kami Boyer kboyer@red-usa.com

+ whatidiscoverwhatidiscover, 2 years ago

custom

1432 views, 3 favs, 1 embeds more stats

Fighting Fraud
Kami Boye
http://www.hedna.org/pdf more

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