Antifraud Toolbox

What tools are merchants using to ferret out fraudulent orders?

By Sarah D. Scalet

February 01, 2006 — CSO — What tools are merchants using to ferret out fraudulent orders? Below, highlights from a recent survey:

75% Address verification service. Checks that billing address listed by customer matches billing address on file with credit card company.

66% Card verification number. Asks customer for an extra security code, often printed on the back of a credit card above the signature lines.

32% Address point verification. Confirms a valid shipping address.

29% Payer authentication services. Prompts users who have signed up for Verified by Visa or MasterCard's SecureCode for an additional password.

28% Company-specific fraud screens. Checks order against company-specific data, such as typical order quantities.

27% Negative lists. Checks mailing address against a database of addresses associated with past chargebacks or fraudulent activity.

25% Automated decision/order screening. Uses a system that filters inbound orders based on business rules, automatically marking each order "accept," "reject" or "review."

25% IP geolocation information. Checks whether the IP address of the computer used to place the order is physically near either the shipping or billing address.

24% General industry model fraud screens. Checks for anomalous behavior that's not specific to the merchant.

23% Velocity monitoring. Looks for patterns such as multiple orders going to one address or multiple customers with the same IP address or e-mail address.

Read more about fraud in CSOonline's Fraud section.

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