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Some anti-fraud measures most commonly used by online merchants are losing their effectiveness, Julie Fergerson, vice president of emerging technologies for Debix, told IR2006 attendees.
Some of the anti-fraud measures most commonly used by online merchants are losing their effectiveness, says Julie Fergerson, vice president of emerging technologies for Debix Inc. and a member of the board of the Merchant Risk Council. She spoke Monday at the Internet Retailer 2006 Conference and Exhibition in Chicago.
“Merchants must continually invest in new tools,” Fergerson said, noting that as the number of merchants adopting a specific anti-fraud measure grows, the effectiveness of that tool decreases.
That’s because as crooks learn about new anti-fraud tools, they develop ways to circumvent them, Fergerson says. And they know what information is needed to make a card transaction look legitimate, including card verification numbers. “The best practice is to use all the fraud tools available to you,” she says.
One new anti-fraud measure that is proving effective is the so-called positive file, a list of customers that the merchant has sold to before without fraud, Fergerson says. The positive file helps cut costs because the retailer doesn’t have to send every transaction through a fraud screen, but only transactions from customers not on the list.