Black Friday sales are predicted to top £1 billion in the UK this November, but merchants struggle to identify and prevent fraud on the busiest day of the year, warns leading fraud prevention company, Risk Ident.
On Black Friday last year, 180,000,000 online visits were logged during the day, generated an estimated £810 million in sales. Meanwhile, on Cyber Monday, a further 161,000,000 visits were made in the UK, generated an estimated £720 million in eCommerce sales.
“This creates huge difficulties for merchants,” advises Roberto Valerio, CEO of Risk Ident, “as finding genuine fraud among so many transactions is like looking for a needle in a thousand haystacks. Merchants need to be able to identify harmful behaviours, users and devices and prevent fraudulent transactions that damage profits. However, merchants also need to ensure they allow the genuine transactions to go through, or they will lose happy customers.”
1. Use device fingerprinting for identification
Fraudsters want the biggest rewards in the shortest space of time. They will often use the same device for multiple fraudulent transactions. Identifying the source, rather than the user, will help prevent a Christmas payday for these people.
2. Reduce false positives
Analyse all sources of customer data in combination with each other to give you a full picture of transaction activity so you can confidently accept genuine transactions and block fraudulent ones. Linking all the data helps you avoid rejecting and deterring genuine customers, while identifying and stopping the ‘bad’ transaction attempts.
3. Identify account takeovers
Normal user account activity disappears on Black Friday, as consumers’ spending patterns change vastly from their normal behaviours. Use machine learning technologies to help you identify a combination of suspicious factors that indicate the account is being used by an unauthorised person – don’t depend on rules alone.
4. Review high-risk transactions
Artificial intelligence is a vital part of the fight against fraud to help handle the vast quantity of transactions going through your system on Black Friday. But don’t depend entirely on technology to see you through – empowered, knowledgeable fraud managers working with systems that help flag suspicious activity provide the best defence against fraud.
Fraudsters are ready and waiting to take advantage of the Black Friday and Cyber Monday phenomenon by hiding in plain sight. Online merchants need to make sure they can cope with extra traffic and abnormal behaviours or risk turning the biggest sales day of the year into the biggest fraud cost of the year.
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