The U.S. has the largest amount of credit card fraud in the world. Between fraudulent transactions and chargeback fraud, U.S. businesses lose more than $11 billion a year. Analysts also report the number and frequency of fraudulent activity continue to increase.
As more business is done online, the amount of card-not-present (CNP) fraud has increased significantly. Since online customers — whether they are individual consumers or business entities — do not need to show their physical card, it takes extra steps to verify someone’s identity.
One recent study expects the losses due to card-not-present fraud to exceed $130 billion globally by 2023.
Chargebacks also take a toll on businesses. Nearly 80% of merchants say they have seen an increase in chargebacks over the past three years. Despite being called “friendly fraud” by some, there is nothing friendly about the negative impact chargebacks can have on your business. While some chargebacks may be legitimate, nearly a third of businesses say they have difficulty detecting and contesting illegitimate claims.
The best way to prevent fraudulent chargebacks and credit card fraud is to prevent it from happening in the first place.
Command Credit offers multiple ways to handle chargeback management, enhance credit card fraud prevention, and identify fraudulent businesses. Command Credit provides industry-leading credit fraud prevention tools:
- FraudNet
- Ekata
- Cyber Signals
Here is how these three solutions work together to provide credit fraud protection.
Credit Fraud Protection with FraudNet
FraudNet provides a security layer for protecting the entire online estate, including credit card fraud prevention, by asking a series of questions. For example, it checks the relationship between users, devices, and behavior in multiple ways, such as:
- User and Device: Do users and the devices used share a history?
- User and Device Compatibility: Does the device configuration match user preferences and geo-location?
- Device Hostility: Is the device impersonating multiple users or focusing on risky activities?
- Malware: Does device configuration suggest malware of fraudulent intent?
- Device Reputation: Has the device been associate with prior fraud or suspected of fraud?
FraudNet also checks for linkages between data and customer footprints, including:
- Payment details
- Address details
- Cellphones or landlines
- Devices
- Geo-targeting
Besides checking data sources and databases of known suspicious activity, device volume and velocity are also examined. Even if cybercriminals are smart enough to deploy new IP addresses for different “customers,” FraudNet can see that transactions came from the same device and record time stamps. So, multiple transactions from different customers on the same device would be flagged for further inspection.
Credit Fraud Protection with Ekata
FraudNet also integrates seamlessly with Ekata for enhanced credit card fraud prevention. Ekata stores information on more than 12.5 billion identities worldwide. It is the best solution for predicting fraud risk using name, phone number, address, email, and IP address globally. Using artificial intelligence (AI), complex machine learning algorithms, and expert data sourcing, Ekata generates predictive data signals and risk scores for merchants.
Not only does this help clear more good customers and stop fraudulent charges, but it also produces better outcomes when it comes to chargeback management. For example, Ekata users typically see a 20% decrease in chargeback rates.
Credit Fraud Protection with Cyber Signals
Cyber Signals, powered by Profound Networks, evaluates the security attributes of millions of global networks to provide businesses with the information they need to make better credit decisions. Using a dataset of more than 70 million global businesses, Cyber Signals checks online profiles to establish business identity and identify risk factors.
Attribute tracking includes such factors as:
- Mail server verification
- SSL certificates
- eCommerce capabilities
- Cloud providers
- External links and backlinks
- Online history and up to five years of historical data
This tracking helps you better understand risk factors regarding supplier and distributor onboarding and underwriting by evaluating their online security. Leveraging these attributes, Cyber Signals creates predictive models and scores businesses for online risk and business identity fraud.
Credit Card Fraud Prevention and Chargeback Management
Credit card fraud and chargebacks can quickly turn into a huge problem for businesses, especially small businesses that operate on smaller margins. Even if you are successful in fighting back against credit card fraud or chargebacks, you may be out the cost of the products or services you already provided.
Tracking fraud and chargeback management also take a significant amount of time. The supporting documentation and tracking needed to contest chargebacks can be daunting. Many businesses simply give up fighting chargebacks and write off the losses.
A better solution is to take proactive measures to deploy credit fraud protection measures to fight fraud and minimize chargebacks.
Want to learn how to prevent credit card fraud and manage chargebacks efficiently? Contact Command Credit today.