Prepaid and Digital Goods Fraud
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This document discusses the misuse of common fraud prevention tools and provides recommendations. It notes that relying solely on hard limits, manual verification, device fingerprinting, IP blocking, and isolated security checks can harm genuine customers and be exploited by fraudsters. Instead, it advocates for dynamic limits tailored to each customer, fully automated verification, multilayered fingerprinting, avoiding overreliance on IP data, and using a web of interconnected security checks rather than isolated walls.
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Prepaid and Digital Goods Fraud
- 2. Prepaid & Digital Goods Fraud The Misuse of Fraud Prevention Tools
- 3. Irene Brime Head of B2B Communications irene.brime@cashrun.com CashRun Pte Ltd Hillel Krajzman VP of Operations hillel@openbucks.com Openbucks Corp.
- 4. Prepaid & Digital Goods Fraud The Misuse of Fraud Prevention Tools
- 5. Gain a Competitive Advantage through Fraud Prevention
- 6. Merchant A Merchant B Fraud Sales Fraud Sales Who has an advantage?
- 7. Lesson 1 Hard Limits vs Dynamic Limits
- 8. Relying on hard limits stops fraud Misconception
- 9. Hard Limits 3 Amount Based Time Based Merchant only allows customers to buy 3 times/week or no more than $150/month Merchants freeze customers account for a period of time Easy for fraudsters to find out threshold & exploit Risk losing genuine customers, Fraudsters can create multiple accounts
- 10. Same limits on all customers Hard Limits Prone to exploitation by fraudsters Lose genuine customers X X Dynamic Limits Complex for fraudsters to exploit Capitalise on high- spending customers Tailored limits for each & every customer
- 11. Lesson 2 The Misuse of Manual Verification & Additional Tests
- 12. Eyeballing Lack of Standardisation Non-Instant Unacceptable standards for Digital Products Manual Verification
- 13. Additional Tests SMS or OTPs Calling customers Requesting personal ID
- 14. Frustrated Customers Test customers’ patience Lose genuine customers Scalability Fraud teams require more time & resources$ Bottleneck Large volume to manually verify Fraud teams overwhelmed Negative Impacts
- 15. Merchant A Fully automated verification Delivers instantly No extra tests Merchant B Manual verification Calls customers Extra tests
- 16. Manual Verification Harms conversion rates X Non ScalableX 100% Automation Retain customers Scalable BackwardX Increasingly relevant Summary
- 17. Fingerprint ModuleLesson 3 The Misuse of Device Fingerprint
- 18. Modify fingerprintFraudsters Bots & Softwares Unsophisticated Fingerprint Detection Module Accepted Deploy Multilayered Fingerprint to detect these micro-changes
- 20. The trend is to move towards simplicity Info from devices reduced Plugins through NPAPI gone Google removed NPAPI support from Chrome Future of Device Fingerprint: Browsers
- 21. Future of Device Fingerprint: Mobile Same screen size Shared operating systems Increasingly hard to return the plugins to the verification module
- 22. Increase in false positives Simplification Limited info returned
- 23. Summary Combine results across multiple verification areas Comprehensive verification
- 24. Identity Mapping Lesson 4 The Misuse of Identity Mapping
- 25. Systems tend to score negatively when a customer has multiple information Fail to recognise returning customers 3 examples
- 26. Same Customer, Multiple Email Addresses irene@gmail.com irene@yahoo.com irene@cashrun.com irene@hotmail.com Same Customer Positive Risk Points
- 27. January 2014 Same Customer, Multiple Payment Methods X September 2014
- 28. Order #1 Name: Mr. Paul John Smith Order #2 Name: Dr. Paul J Smith Same Customer, Multiple Names X
- 29. What should systems do instead? Identify customers who use different information Find out connections between customers Avoid scoring negative points for such customers
- 30. Misuse of IP Blocking Rules Lesson 5
- 31. Cyber Criminals Fraud teams panic Blanket ban all orders from specific IP address Genuine customers blocked FRAUD! When Fraud Happens… Proxies Evade Verification Corporate IP Disguise “Genuine Customer”
- 33. X X X X Misuse of Information Fraud Verification Tools Summary of Problem
- 34. What’s the Solution? Avoid Over Reliance on IP information: Detrimental to Sales IP Abnormalities are Common IP Penetrating Technology to detect: VMwares Fake Corporate IPs Proxies Hosting IPs
- 35. Detrimental to sales Over reliance on a certain area
- 38. Lesson 6 Web of Securities vs. Wall of Isolation
- 39. IP Address Blacklist Whitelist Device Fingerprint Velocity Checks 3DS Etc. Fraudsters Merchant Wall of Protection Fraud Rate MISCONCEPTION!
- 40. Fraud can be predicted with a Multi-Layered Security System
- 41. Fraud and chargeback happen in waves
- 42. Peak Periods of Fraud
- 43. Calmer Periods
- 44. What happens when the wave is higher than your wall of protection?
- 45. The wall blocks out genuine customers
- 48. buying limit imposed Accepted transactions
- 49. Dynamic limit imposed Accepted transactions
- 50. It’s not about How many fraud tools you have but How you use them Optimization is the key
- 51. Thank you! Questions? Find us at booth 41
- 52. WE WANT YOUR FEEDBACK! Please complete your session evaluation within the MRC mobile app or return a paper evaluation on your way out. Prepaid & Digital Goods Fraud: Misuse of Fraud Prevention Tools Speakers: Irene Brime, CashRun Pte Ltd Hillel Krajzman, Openbucks Corp. Key Takeaways 1) Takeaway 1 2) Takeaway 2 3) Takeaway 3 4) Takeaway 4