A number of leading UK retailers have announced they are sharing
data through a fraud and loss prevention coalition being launched by consumer
insight and anti-fraud specialist Transactis – forging a powerful new weapon in
the battle against both professional and opportunistic fraudsters, while
strengthening processes that ensure genuine customers receive better service.
The initial members of the Transactis’ TRADE scheme include
multimedia retailer QVC UK and multi-brand online retail group Shop Direct – whose
divisions include Very.co.uk and Littlewoods.com. The scheme aims to vastly
improve merchants’ ability to spot potential fraudsters at any customer touch
point and act rapidly by enabling them to tap into behavioural data across
multiple brands.
Sharing data via TRADE will not only better equip retailers
to identify, investigate and challenge potential fraudsters, but it will make
it quicker and easier for them to authenticate genuine customers making
legitimate claims for missing deliveries, lost returns and other order
problems.The result is that honest
consumers – who make up the vast majority – will see data checks clear the way
for expedited responses to reported distribution errors and similar issues.
With these key players signed up to the new data-sharing
initiative, TRADE already brings together customer information from nine
million UK households – 39 per cent of the marketplace – and is inviting other
retailers to join. Members are able to make quick decisions on questionable
customer conduct and suspect transactions based on analysis of consumer
behaviour patterns across a wider information base than previously available.
TRADE is the first database that shares real-time fraud and loss information
from both ‘cash’ and ‘credit’ etailers.
TRADE allows retailers to more quickly and easily identify
fraud and loss risk related to order processing, identity verification, goods
lost in transit, returns and other related activities by providing a view of
the broader pattern of each customer’s behaviour across a much larger range of
transactions. The scheme draws on data not just on individual consumers but on
addresses so that, through sophisticated data matching techniques, retailers
can detect fraudsters using multiple identities across several organisations and
other tactics for masking dishonest activities.
Notes John Pears, director of credit risk and operations at
Shop Direct: “TRADE has been put together with input from retail players that
really understand the impact of fraud and the need for a loss prevention
platform that addresses the challenges they face each day. The retail industry
– especially the companies involved in ecommerce and other forms of home
shopping – needs a system that takes this type of loss prevention to the next
level.”
He adds: “Previously, we’ve had to rely on data developed
for use by financial institutions, which does not fully address the very
specific cyber threats that online retailers are facing today. TRADE will add a
new, universal layer of fraud data that will enable retailers to identify these
threats more effectively and reduce fraud losses as a result.”
TRADE provides member retailers with all the information
they need to quickly decide how to proceed at any point in the customer journey
– their initial contact with the company to registration to order to payment to
fulfilment. The result is decisions can be made in real time on whether there
is strong risk of identity theft, no intent to pay, a false goods lost in
transit (GLIT) claim or another form of fraud or misrepresentation.
Dave Webber, Product and Professional Services Director at
Transactis, explains:“There is a very
narrow window for a retailer to review an order and decide what action to take.
Not only is there the relationship with the customer to consider – for
instance, the retailer can’t just wait and see what happens if a delivery goes
missing – but there is the cost that further investigation would entail, so there
is a real need for the company to have relevant information that enables it to quickly
and efficiently assess a situation and prioritise the use of its resources.”
Martin Spencer, Finance Manager of QVC UK, comments: “Best practice and doing things the right way
– for both the business and the customer – depends on having the right tools to
tackle retail fraud. TRADE provides a new and essential instrument for doing
this, providing a ground-breaking means of cutting down losses arising from
first-party fraud against retailers engaged in ecommerce. It is a solution that
the whole sector could pick up on – to everyone in the industry’s advantage.”
He concludes: “Companies in the retail industry have
not really worked together before to deliver a collective anti-fraud service
that covers both card and credit transactions, so TRADE is providing a real
opportunity for a level of information-sharing that has not previously been
possible. This will not only ensure quicker and more effective fraud screening,
but it will mean that we and other TRADE members can do a better job of making
sure genuine customers get the best possible service.”
More TRADE
details
TRADE officially stands for Transactis
Risk Assessment Data Exchange. Members share customer data relating first party
fraud, third party fraud and all other types of loss, enabling retailers see
beyond the narrow picture of a customer’s behaviour that their own
transactional data reveals. The data is not shared for any other purpose but
loss and fraud prevention. The TRADE system allows members to review 187
incremental facts about an individual, including the number of:
- matched
members - matched
addresses - accounts
the customer holds - accounts
with no losses - accounts
used for suspected fraud - accounts
with chargebacks - individual
orders - orders
with GLIT claims - items
claimed - items
returned
Other
variables that can be taken into account include value of arrears, fraud and
failure to pay, along with ratios such as account loss, claim to order and
return to item value. All these figures are viewed across the entire database,
taking in all members and enabling participating retailers to see a broader
scope of activity that might raise red flags. The scheme is governed by the
members and Transactis, with a rotating chairmanship.
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