Findings From the First Fraud Fighters Forum
By Emily Chin /
15 Jul 2016
What happens when you bring together craft beers, tasty Thai bites, and excellent company? While this scene could be any hipster meetup, what set June 30 apart was the fact that food plus fraud folks makes for the first Fraud Fighters Forum event in San Francisco. The night was attended by 30 local fraud fighters from a variety of online businesses, and led by subject matter experts who helped to facilitate conversation and share best practices.
Let’s take a step back for the folks who may have gotten stuck on the first sentence and wondered about the mysterious, alliterative event that took place last month. What exactly is the Fraud Fighters Forum?
FFF: an overview
No one catches fraud in a vacuum, and chances are good that fraud managers and risk analysts are experiencing common frustrations. At Sift Science, we want to build connectivity among the people who are on the front lines of fighting online fraud and create a global community for fraud managers, risk analysts, and payment professionals, guided and inspired by leaders in the field.
Perhaps most important in all of this is Sift’s goal role: we just want to facilitate and sponsor the physical meet-ups – and, maybe some day, an online Forum – while fraud people are actually running the show, selecting the discussion topics, and leading the conversation. The Fraud Fighters Forum is for any Fraud Fighters who want to collaborate and commiserate with their counterparts across industries and geographies – not just Sift Science customers and prospects.
What happened at the first forum?
The first Fraud Fighters Forum event took place at the Sift Science offices in downtown SF. Tal Yeshanov, Zoosk’s Payments & Risk Manager, was the host and emcee for the night, while Robbie Fritts and Kevin Lee – 2 highly experienced fraud-fighting pros – joined her to help lead breakout discussions.
The majority of the evening was dedicated to these discussion groups, each fairly equal in size, where folks chose to talk about 1) payment fraud-related challenges, 2) dealing with chargebacks, or 3) how big data can help in the fight against online fraud. Everyone agreed: the conversation was awesome. Here are a few of the takeaways and shared struggles that were covered:
Dealing with declines stinks
For many businesses, fraud reduction efforts often correlate to an increase in fraud false positives. While a 2:1 false positive rate for auto-declines may work for some, on the flip side, that means that for every 3 auto-blocked orders, only 1 was actually fraud. What’s an acceptable “success” rate for automated declines for your team?
Friendly fraud is SO frustrating
Nearly every company we talked to faces some form of “friendly fraud,” which is – in our opinion – a gross misnomer. But how do you diplomatically approach customers who are behaving like legitimate users…until they do something out of character and abuse the system?
When is friction too little? Or too much?
Lots of merchants are drawn to the idea of adaptive checkout or account creation, where form fields and authentication roadblocks can be added or removed, depending on a user’s riskiness. However, balancing the potential for adding friction with possible slowing or losing transactions from good – but impatient – users is tricky. Worse still, “Guest Checkout” doesn’t give merchants the tools to verify customer identity.
New payments methods = new fraud challenges
Digital wallets, ACH options, and online payment solutions are great! But they’re also becoming another pain point for businesses of all types. Verification is near impossible, and disputing chargebacks is made frustrating by issuers that are still figuring out how to deal with these new payment types themselves.
Catch ‘em all!
Forget Pokemon Go, fraud managers have enough to deal with trying to catch all the fraudsters. Although some merchants ban a bad account after their first chargeback, what they really want to do is identify the other accounts that a single bad user is linked to and ban all of those linked accounts at the same time.
All in all, the night brought out some shared hair-pulling moments, favorite “dumb fraudster” stories, and excellent key learnings. We’re continually thinking about ways to improve the Fraud Fighters Forum, as well as planning our next event. Help us pick our next Fraud Fighters Forum meetup city by voting today and share what you’d want to discuss with other fraud folks.