How social media can be used to expose CNP fraud

We completely enjoyed being on the  panel “Socially Unacceptable: How Social Media Can Be Used to Expose CNP Fraud” at the CNP Expo 2013. Panelists included Denise Aptekar from oDesk, Louis Kearns from Shopify, Rajesh Ramanand from Signifyd and was moderated by Andi Cook from TNSVerify. The panelists covered the following topic:

Pervasive use of social media has left a digital footprint for a large and growing chunk of the population. Our panel discusses how merchants can leverage the tracks left behind by Twitter accounts, Facebook pages and the proliferation of newer social sites to more effectively predict fraudulent CNP transactions. Learn how to integrate social data into your existing systems.

This is a re-post from the CNP Blog.

CNP Expo: Social Media’s Growing Role in Fraud Prevention

May 22, 2013

One in seven people in the world have a social media profile of some sort. According to panelists at a late afternoon session of the 2013 CNP Expo, risk evaluators are beginning to take advantage of this to help fight fraud in card-not-present transactions. Customers themselves now (unwittingly) provide the information that helps determine the credibility of a transaction through their digital footprints. For instance, does the person’s “current city” on Facebook match the shipping address for the goods they are trying to purchase?

Denise Aptekar of oDesk noted that social-media profiles allow merchants not only to determine that a transaction is high-risk, but actually to prevent false positives in Merchant Fraud Prevention models. She gave the real-life example of a consumer who was new to both eBay and PayPal who tried to buy ten washers online for $1,000. Such a transaction was blocked automatically by both eBay and PayPal, until a fraud analyst did a Google search and found that this person had been buying and selling used appliances on Craigslist for the past five years. This shed new light on a transaction that initially appeared risky, and showed that this person is in fact a highly valuable customer for both eBay and PayPal.

Louis Kearns, head of ecommerce at Shopify, noted a number of factors to look for to determine whether a social media profile is legitimate: “You can make decisions about the likelihood of fraud based on when a profile was established, how many connections the person has, how frequently the profile is updated, etc. Once you know what to look for, a good profile is hard to fake.”

Going forward, Rajesh Ramanand of Signifyd said, the challenge for merchants will be to automate some of these social media searches to allow decisions about fraud to be made more quickly.

The panel also discussed a recent change in Visa and MasterCard chargeback policy that allows merchants to submit evidence from a social-media source to contest a chargeback. Ramanand gave the example of a customer who claims a product was never shipped. If the merchant finds a photo of that item in the customer’s Twitter feed or Facebook profile, they can challenge that claim and prevent the chargeback.