By JEFFREY LIESENDAHL, chief executive officer of Accertify, a Chicago-based provider of fraud solutions to merchants that accept transactions when a credit card is not present
1. Choose a comprehensive fraud-prevention program that fully integrates the front-end screening system with the manual-review and charge-back management processes. Taking an end-to-end approach will improve the performance of your fraud team and save ymoney.
2. Utilize a platform that provides multiple tools to screen for suspicious orders. A fraudster who successfully bypasses the address verification service and card-verification number checks may be caught by device identification, identify verification or geo-location technologies, or by a negative file check.
3. Use an automated system to dynamically sort, rank and prioritize suspicious orders. This will keep analysts focused on high-dollar transactions or orders that need to be shipped soonest.
4. Create "negative" files for checking orders based on rejected transactions and fraudulent orders that resulted in charge-backs. Update the files automatically. Also create "positive" files from customer records data to stop flagging good customers as suspected fraudsters when their buying habits innocently make them appear risky. Both approaches will reduce the volume of manual reviews.
5. Use an automated, case management "workbench" that aggregates all relevant data elements, displays them real-time on a single screen and automates the validation of order information. Analysts will be able to work more quickly and make better decisions, reducing the time spent per order while increasing accuracy.
6. Design fraud solution to be flexible. The system should permit nontechnical users to modify screening rules so they don't have to wait for help from time-pressed information-technology departments. It should also allow easy plug-in of new tools for responding to ever-changing fraud schemes.
January 19, 2009
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