Building on the success of our 2020 roundtables, in 2021 Identiq kicked off the Fraud and Identity Forum roundtable series: discussions throughout the year which brought fraud fighters, trust and safety professionals, and identity pros together to talk about the hottest topics and challenges they face. 

Participants came with open minds, plenty of experiences to share, and the desire to help each other find solutions to the knotty problems that other departments in their organizations just don’t quite understand. Every discussion was in-depth, insightful and memorable. 

As the roundtables run under Chatham House rules, no companies or individuals can be quoted afterwards, but we’ve gathered some of the most notable highlights from the 2021 series here. Like the queries sent to Identiq’s network, all the comments referenced are completely anonymous! 

All topics - and the questions we focused on during the discussions - came from participant requests. So if you have something you’d love to talk to your peers about in 2022, let us know!

Promo Abuse

Promo Abuse was such a pressing topic in 2021 that we ended up running not one but two roundtables to discuss it, one at the beginning of the year, and one at the end. Fraud fighter after fraud fighter expressed their frustration with this form of abuse, which often winds up in the lap of the fraud team even though it’s not typically carried out by professional fraudsters. 

The customers who carry out promo abuse at scale - which participants agreed was where the problem lies - tend to exhibit similar behavior, and use similar tricks, to amateur fraudsters. They use proxies or VPNs to clumsily disguise their IPs, exploit electronic wallets and prepaid cards, and set up multiple email accounts to help them appear to be many different individuals.

Key Learning: Identifying promo abuse is only a small part of the challenge. 

Far more difficult is getting consensus across the organization about how to define promo abuse, what methods can be used to deal with it, and what level of friction is reasonable to prevent it. 

Participants discussed how to educate other departments about the challenge effectively, how to carry their case convincingly to upper management, and what KPIs ought to be associated with promo abuse prevention. 

There was so much fascinating material arising from the promo abuse discussions that we ended up creating an ebook on the topic, together with a handy checklist for fraud fighters combating promo abuse in their own company. 

Fraud Prevention and Trust & Safety

Fraud Prevention and Trust & Safety: Two sides of the same coin? That was the topic of a roundtable which brought fraud fighters and T&S pros together to discuss the similarities and differences between their roles - and how they can best work together. 

Different companies had very different ways of distinguishing between fraud and T&S concerns, and expressing that in their org charts, but participants across the divides agreed that close collaboration was crucial. There were a lot of reasons given for this, but these were the ones that came up again and again:

• They see the same bad guys.
• They can share what works.
• They can keep each other up to date on shifting consumer behaviors. 
• Identity validation affects both teams’ work.
• Mutual impact: Because concerns often overlap, combining forces can get better results in terms of attention, budget and resources. 
• Collaboration makes things more coherent for users. 
• Better coverage for the entire customer journey. 
  

Key Learning: Friction is everybody’s problem. 

While responsibilities may vary between companies and teams, all the participants shared the same concerns about friction. This was a key area where many participants had found the greatest benefit in collaboration. 

Interestingly, when fraud and T&S folks were working together, they had greater success not only educating other departments about the challenges they combat that lead to friction, but also persuading inter-departmental colleagues to build fraud and T&S concerns into their flows, taking user protection into account early on in design and product ideation. The impact continued into live production. 

ATO

ATO turned out to be a particularly hot topic this year, with several companies reporting increased concern over this form of fraud following increases during 2021, and the discussion was lively. Participants agreed that there were two crucial factors in identifying ATO:

1. Identifying anomalies in behavior you would expect from existing customers 
2. Looking for multiple points of commonality between accounts or logins
   

The uses discussed that fraudsters make of ATO attacks were particularly diverse, including: making purchases, either with stored payment method or loyalty points, or using the legitimacy of the account to leverage another stolen source of funds; withdrawal of funds (including gift cards and loyalty points); peeking for PII; adding new account info; refund fraud; theft of items; and promo abuse. 

Key Learning: Tailor identification efforts and friction as much as possible, across the customer journey. 

With ATO, participants talked about using knowledge of both an account’s typical behavior and relevant profiling according to the type of buyer persona they belonged to, in order to identify ATO but avoid false positives. 

In a similar way, they discussed how friction should also be tailored, depending on the level of suspicion, the risk level of the market and the products involved, etc. 

Many participants spoke about the key for them, in combating ATO, being the realization that it should be something the system searches for throughout the customer journey, not just login and not just at checkout. This more holistic approach, as one participant put it, “gives you the deep insight into the user - this user, right now, and that user, who checked in a hundred times before - that you need to catch ATO.”

Using chat logs and call center transcripts was felt to be a very valuable, and underused, tool in combating ATO. 

Click-and-Collect: Buy-Online-Pick-Up-in-Store Fraud

BOPIS has been popular with consumers for years, but really came into its own during the coronavirus pandemic, when risk-conscious shoppers preferred to avoid entering stores unnecessarily. Offering click-and-collect is great for customers, but causes an additional headache for fraud prevention teams, who have to decision online orders without the help of a relevant shipping address.

Participants agreed, ruefully, that while asking for identification would be very helpful in preventing fraud in this channel, it’s hard to justify in a time when legitimate customers are understandably reluctant to pull masks down or exchange physical ID cards. Unfortunately fraudsters are more than happy to take advantage of exactly these reservations.  

Key Learning: Physical presence can be a fraud fighter’s friend. 

Online fraud prevention experts often don’t consider physical prevention methods like CCTV, but many participants spoke about the value they’d seen using not just the cameras but also prominently displayed notices letting customers know, in large font, that they were being recorded. 

Beyond that, while online-only transactions are rarely prosecuted due to jurisdictional ambiguity, BOPIS fraudsters can be caught red-handed, and handed over to local law enforcement. 

As one participant put it, “It’s one thing for a fraudster to sit comfortably hiding behind their computer screen. It takes a different kind of guts to turn up at the store and physically steal a package, on camera - knowing the store could call the police any time with a recording to prove their case. The more you emphasize that possibility to criminals, the less keen they seem to get on click-and-collect fraud.”

Collusion

The roundtable on collusion was another in which fraud prevention and T&S professionals shared their experiences and insights with one another, each bringing their different priorities and techniques to the table. 

Collusion, when more than one account work together to misuse or defraud a platform, is typically a marketplace problem, but comes up in a variety of cases, including credit card fraud, promo abuse, money laundering, feedback padding, driving up bids at auction and exploiting advantages given to established sellers - all of which were discussed during the roundtable. 

Participants discussed how marketplace integrity is a key concern, since collusion can dramatically undermine the platform experience for good users. 

Key Learning: Look for the links.

In general, looking for links between accounts or patterns of behavior was considered the most effective method of identifying collusion on a marketplace. Is there some kind of affiliation between the accounts? This played out in a number of different ways:

• Look for shared account details
• Look for patterns in account details
• Look for shared behavioral patterns
• Look for changing account details
• Look for abnormal velocity
• Look at an account’s relationships
• Look for patterns across time
• Leverage the registration process
  

As one participant put it, “patterns require repetition.” Sometimes collusion can only be caught after the scam has been in place for a short period of time. Velocity is great, but it requires that there be a pattern to start with. 

Since a short period isn’t enough to enable scale, though, most participants felt that this approach does solve most of the real problem. Moreover, as another participant said, “once the seller/buyer has been caught, it’ll probably be easier to catch them in the future if they try it again - which is key, as far as my team is concerned.” 

Gaming Roundtable Series

Identiq also holds an exclusive series of roundtables for the gaming industry specifically, because of the unique challenges faced by that industry. Discussions at roundtables this year included ATO, payments in gaming, collaboration, and more. If you're from the gaming industry and would like to join these discussions, please let us know!

2022 Roundtables

The 2021 roundtable series was a fascinating journey of discovery for us and for our participants. We can’t wait to host more roundtable discussions in 2022 - and we’d love to hear your ideas for which topics ought to be on the agenda! Let us know your thoughts here. 

Make sure you don’t miss out on the 2022 series by signing up right here. 

Feel free to share the link with team members or other relevant colleagues and departments who might be interested in attending too. The best discussions come from bringing disparate perspectives together, so help us make that happen!