April 7, 2011, 11:44 AM

A ticket vendor slices scalpers with fraud tools

New Era Tickets uses an automated fraud prevention tool to reduce fraud losses by 98%.

Lead Photo

In the fast-moving business of online ticketing, merchants can have mere seconds to  accept or decline a transaction. For ticket vendors, this can mean criminals slip through and buy tickets with stolen credit card information.

However, New Era Tickets, with the help of fraud prevention vendor Iovation Inc., cut ticket fraud losses by 98% by identifying suspect activity coming from individual computers and declining those transactions.

The ticket seller had to get better at stopping fraud, says Steve Geib, New Era Tickets vice president of client services, because some of the online ticketing innovations meant to make online ticketing convenient, such as print-at-home tickets, has made it that much harder to stop fraud. With print-at-home ticketing, for example, a criminal can place an order using a stolen credit card, print the tickets and be on their way. 

“In our business, catching the bad guys can be really difficult,” Geib says. “Since there’s nothing being shipped, we’ve got to stop them upfront. Our real challenge is trying to find them fast and reject the order outright.”

New Era Tickets enlisted the services of Iovation because it focuses on stopping fraud by identifying the devices from which orders are placed. With device recognition, New Era Tickets can see if multiple orders are originating from one computer.

“Every time someone puts in a new address, a new name, etcetera—you can’t tell if it’s really a different person,” he says. “Now I can tell that someone at one machine just bought 80 tickets.”

Iovation has tools that identify each device’s unique Internet protocol address, even when criminals try to mask addresses using a proxy server. That common fraud technique makes it appear they are coming to a retail site from a reputable organization, such as a corporation, public Internet service provider, university or hospital, or hides the fact they are coming from countries associated with online fraud.

Iovation thwarts those attempts using proxy piercing, a technique that examines much more than the presented IP address of the shopper's computer to determine if a proxy server is being used and to establish the true geographic location of the shopper's IP address

It then compares that address against a large database of known IP address activity data where it can see if that device has been used previously to commit fraud. It also measures the frequency of transactions coming from that address. Using the system’s tools, New Era Tickets sets its own business rules to identify transactions it will accept or reject.

Geib says the information he gets from Iovation shows him who and where criminals are.

“They think they’re fooling us, but we can see them moving around,” he says.

Since implementing Iovation tools, Geib says the company’s seen a 98% reduction in fraud losses.

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