Fraud Severity and Prevention Strategies - a Q&A with Rafael Lourenco
WM: PROVIDE WEBSITE MAGAZINE READERS A SENSE OF HOW SEVERE THE PROBLEM OF FRAUD IS WITHIN THE DIGITAL ECOSYSTEM.
RL: Fraud and data breaches are a pressing issue. As online sales are rising (projected to reach $523 billion by 2020), and nearly half of all websites experiencing some kind of data breach, fraud security is becoming on the forefront of a lot of retailers minds. Most people know the direct impact of fraud in the digital ecosystem, but there are also some indirect factors that many people end up ignoring. One major industry problem is rampant “false declines,” or when a good transaction is declined due to suspicion of fraud. It is estimated that false declines will cause a loss of $8.6 billion in 2016. Losing good clients due to fear of fraud can cost merchants dearly, not just in loss of orders, but also in brand damage and client loyalty cost. Our fear of fraudsters has caused merchants to become overprotective and fraud companies to implement very conservative machine-learning systems that decline good transactions. This is why we have always focused on balancing high conversions while simultaneously minimizing fraud losses. We are dedicated to giving business owners the “freedom to sell” without the stress of dealing with fraud.
WM: WHAT SHOULD E-COMMERCE MERCHANTS, EVEN "LOW-RISK" SELLERS, KNOW ABOUT PREVENTING ONLINE FRAUD?
RL: Fraudsters will usually target high-cost products like smart phones, high-end jewelry, adult items, and clothing as they are easy to resell. If you sell this type of merchandise, you must take extra precaution to have your fraud management tools in place. However, in a lot of cases, fraudsters will attempt a low-risk product just to see if the credit card is valid. They will target low-risk sellers under the assumption that they are the least protected. We have seen a lot of fraudsters try to obtain items that are generally viewed as low-risk like books, diapers, and even gardening products in an attempt to see if their newly-obtained stolen credit cards are working.
WM: WHAT ARE THE MOST SIGNIFICANT BENEFITS OF OUTSOURCING FRAUD MANAGEMENT?
RL: Business owners should always be aware of the fraud risk of their company, but we firmly believe that every retailer would benefit from an outsourced fraud management system. Doing your own fraud management can be costly in time, staff and [to continue reading please click here].