Some crooks found its site, which offers 99-cent downloads, an enticing place to test whether stolen credit cards worked. Others joined CD Baby pretending to be artists and created an album using stolen music. They’d then repeatedly buy the album with stolen credit cards to collect artist commissions. Still others posed as affiliates and made purchases using stolen credit cards to collect fraudulent affiliate commissions.
The recurring fraud attacks drove chargebacks up to 2.6% of its transactions.
“80% of my time, seven days a week, I was trying to contain fraud,” says Christine Barnum, the retailer’s controller. “It was like whack-a-mole. I would identify a pattern and put rules in effect to stop it and the fraudsters would come up with another trick.”
After the retailer’s chargebacks topped $26,000 in a single month, CD baby decided it needed to find a better way to fight back. It turned to Kount Complete, a fraud prevention technology platform from Kount Inc.
With several fraud prevention tools, including device fingerprinting and risk-scoring tools, the Kount Complete platform has enabled CD Baby to process high volumes of transactions while improving its ability to accurately identify which orders should be accepted, blocked or temporarily held for manual review.
The new system, which is hosted by Kount in a software-as-a-service environment, has resulted in a 96.2% drop in the retailer’s chargeback rate, to less than 0.1% from 2.6%, Barnum says. Moreover, Kount’s Order Linking tool, which aims to identify customers using stolen cards, has dramatically reduced the number of transactions that have required manual review. “I’m back to doing my job instead of spending my entire week battling fraud,” she says.