The Bank Merchant Connection

We were out at the Merchant Risk Council show this past week, where we were launching our new e-commerce solution to detect fraud amongst BILL-TO / SHIP-TO address discrepancies. A couple of things came to light that began to shed some new light on how the fraudsters are committing fraud. I was speaking to one large electronics merchant. They mentioned that they just got done researching a possible fraud case, where the orders were typical of fraud. They saw over 100 orders, all for the same product ($200), all in a very short amount of time. The total amount of these purchases was $20,000. When the fraud investigator got ahold of it, they immediately called the card issuer. The card issuer went on to explain that the customer was in good standing, and nothing amiss. After thinking about it, it became apparent that this was probably was fraud. However – it is my guess that the consumer hiding behind those orders had either committed Identity Theft to open that “good” account, or had created a fictitious identity.

The only way we could have detected this would be for us to understand the dynamics about how that account was opened. How long had the account been opened? Was the account opened with an address discrepancy?, etc… If there was an address discrepancy, did that address change make sense? Knowing this would allow us make a much better decision on whether those purchases were legit.

There has always been a void in information being passed from that of the bank or issuer to that of the merchant. Having this information provided would allow the merchant (and bank) to make a much more informed / efficient decision. In doing so, suddenly the online channel becomes more secure.


Date Posted: March 8, 2008 Author: Category:   IDI Blog

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