The top concern with online fraud is the overall financial impact on the company, according to a survey conducted during Kount’s “Get on the Road to Less Online Fraud” webinar yesterday.
Of the webinar attendees surveyed, 54% agreed that the financial impact is a heavy concern, which is “not an unusual response,” Don Bush, vice president of marketing at anti-fraud technology service provider Kount, said during the webinar. “Many of the financial impacts are sometimes hidden,” he said.
Additionally, 14% of respondents agreed that the amount of money and time spent on manually reviewing transactions is a top concern.
However, merchants and dealers are not the only institutions affected by fraudulent activity. For several powersports lenders, consumer fraud — particularly identity theft — is on the rise, compared to a year ago, and finding ways to mitigate that fraud is a top priority for many companies, several lenders told Powersports Finance.
“You are not in this business of lending money in powersports or auto without getting stung by fraud,” Tom Collins, executive vice president and managing director at FreedomRoad Financial, previously told Powersports Finance. “It’s just the nature of the business. Just like you will have repos, you will not jump in and expect to not have it [fraud]. That’s something that is understood, but you want to minimize it.”
One area of fraud is account creation — whether they are applying for loans, credit cards, or other financial assistance, Bush said, and every transaction has “hundreds of data points to evaluate the level of risk.”
Kount helps businesses boost sales by reducing fraud with its SaaS platform, which simplifies fraud detection and helps online businesses accept more orders. Kount’s proprietary technology has reviewed billions of transactions and provides protection for some of the world’s best-known brands.
Here are three best practices, as used by Kount, to help mitigate consumer fraud:
1. Use Real-Time Analytics
Pay particular attention to the email address, Bush said. “Have [you] seen it before linked to bad activity? Let’s look at the billing address, let’s look at other things that can satisfy the questions [you] have,” he said. Then, look at other areas of data to see if the situation can be remedied.
2. Know the Benefits of Machine Learning or AI
There are hundreds of pieces of information to look at when evaluating a consumer application for fraud, Bush said. “Humans can take a long time to do that, so we let machines look through hundreds of millions of transactions, to determine if this is risky behavior or not.”
Even if a dealer, for example, may be holding a transaction for review and checking a few sites for red flags, there are many more variables that they may not know to look for, he added.
3. However, Don’t Underestimate the ‘Human Factor’
While there are hundreds of variables to evaluate, it is important that “the human factor of this shouldn’t be underestimated,” Bush said. “All of this computation is fantastic, but you know what your customers do best, you know what a normal thing looks like. We don’t want to underestimate that.”