Trending Topics in Fraud Fighting

By Nate Kharrl

Business, cybercrime, and technology are always changing, so no two years at fraud industry conferences like the Merchant Risk Council are truly the same. For the benefit of those who couldn’t attend, I condensed the most popular topics on the minds of the fraud fighters I spoke to at the 2023 event.

There are no silver bullets in fraud prevention

There are fewer and fewer merchants that believe there is one fraud provider that can operate as a one-size-fits-all solution to their various fraud prevention needs. Many merchants and marketplaces are blending various solutions – even direct competitors – to achieve the best possible outcomes and drive better outcomes.

Some solution providers haven’t caught up with this, and levy punitive performance or contractual terms for merchants and marketplaces that don’t work exclusively with them. I’m hearing from these same merchants and marketplaces that they are increasingly looking to move away from vendors that operate this way.

Modern fraud is much more diverse than bad payments and ATOs

Another insight I gained from the event was the level of exposure and awareness merchants shared about everything-else fraud, which has advanced considerably. Previously considered “fringe,” refund abuse, marketing abuse, triangulation fraud, inventory depletion, and other forms of fraud are becoming increasingly common and driving a much higher net-loss number for many merchants. 

MRC was an excellent opportunity for merchants to suss out their unknown unknowns and get more knowledgeable about how to identify new risks. Moving forward, it looks like leading merchants will be more proactive about ensuring that they’re addressing all types of fraud, not just the most common ones.

Proactive fraud solutions are in demand by merchants

Finally, many merchants are looking for proactive solutions that give them risk insights by uncovering facts about the visitor’s identity and present behavior – before they’ve done anything fraudulent. In the meantime, they’ve been lurking on Telegram and WhatsApp groups, monitoring the dark web, and looking up identities. A majority of fraud detection solutions still rely on historical models, consortium networks, and machine learning, which merchants were saying just isn’t fast enough to deal with the level of sophistication today’s fraudsters are exhibiting. We’re helping a number of merchants get direct access to this data in real-time using our Trust Cloud, enabling them to proactively identify new high-risk individuals interacting with their websites and apps.

Overall, the event was a great opportunity for me to connect with old friends and new faces in the fraud prevention industry. I’m grateful for the chance to share my key takeaways and insights with you and hope that they’ll help you in your own efforts to prevent fraud. Until next time!

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