Posts Tagged ‘Fraud Prevention’

Preventing Fraud Associated with the Freight Forwarding Industry

Service Objects is committed to fighting fraud and bad data wherever we see it. Through our APIs, best practices when handling sensitive data, or through recommendations on clients’ business logic, we are here to help enhance data quality and eliminate fraud.

A good example of the latter is educating our customers about how to avoid fraud losses. One way is by paying closer attention to orders using freight forwarders – which are legitimate services that are often misused by fraudsters. At the end of this post, you will find a free resource to make this easier: an extensive list of shipping and freight forwarders that you can use to help fight fraud when fulfilling orders.

What is a freight forwarder?

Freight and shipping forwarders arrange for the exporting and importing of goods. These companies often specialize in storage and shipping of goods on behalf of customers. In short, they help arrange for goods to get from point A to point B.

Are all freight forwarders associated with fraud?

Absolutely not! There are many reputable freight forwarders that do great work in coordinating the shipping of goods between consumers and sellers. When fraud is perpetrated, they are co-victims along with the seller. That being said, freight forwarders are often a go-to-tool for duping vendors and sellers into footing the bill for fraudulent purchases.

The typical process may go as follows:

  • A customer will place a large order, and ask that the product(s) be shipped through a specific freight forwarder.
  • The customer will offer to reimburse the seller for shipping through the freight forwarder – and normally wants the order shipped quickly, before the scam is discovered. (Money is no object for orders like these, because they are usually being placed with stolen or compromised payment methods.)
  • Often the fraudster will have set up a legitimate-looking website ahead of time to give the appearance of a legitimate and trustworthy business.
  • After the seller ships the goods and they are picked up by the fraudster, the payment for the shipping fee and the products itself usually falls through, leaving the seller to foot the bill for both the freight forwarder’s services and inventory loss.

How do I avoid fraud where freight forwarders are used?

Great question! One of the best and easiest ways to help mitigate this type of fraud as a seller of goods is to pay extra attention to orders using a freight forwarding company’s address. For PO’s like these, it would be smart to build in business logic for some extra vetting to ensure the purchaser’s legitimacy and help prevent fraud from the start.

That is why we are providing a list of all the freight forwarders we could find. We recommend using this list to detect matches between an order’s shipping address and a freight forwarder’s. To do this, run an order’s shipping address through our DOTS Address Validation – US service and use the BarcodeDigits field as a unique identifier for an address. If the BarcodeDigits address matches a freight forwarder’s address, the order should be flagged for some additional vetting to verify its authenticity.

Service Objects is committed to helping our clients avoid fraud however we can, and this list and the business logic is just one strategy that can make a real difference. If you need help setting up our address validation tools, please feel free to contact us, we are always happy to help.

Protecting Your Business from Ecommerce Fraud

Most ecommerce merchants learn the hard way; orders and registrations from fraudulent sources cause financial, merchandise, and time losses. With the rise of mobile ecommerce and the proliferation of high-profile data breaches, you’ll need the best information and tools available to combat fraud in your marketplace. The October 2017 Global Fraud Index reported a total of $57.8 billion in ecommerce fraud losses in eight major industries.

Ecommerce fraud continues to grow, and the best way to protect yourself is a good defense. Here are some of the most troubling fraud issues ecommerce merchants face, and how to limit your exposure.

Identity Theft

Identity theft is defined as the fraudulent acquisition and use of a person’s private identifying information, usually for financial gain. Financial identity theft through credit card fraud is what most people envision when they think of identity theft.

Identity thieves use a person’s identifying information, such as name and address, or an existing credit card to make a purchase on your website. Frequently, this data is acquired in a breach or skimming scam and sold on the black market before a victim even knows they’ve been compromised.

DOTS Order Validation can help identify if a user is who they claim to be by cross-checking the information provided at the point-of-sale, such as Ship To and Bill To address, phone number, and Banking Identification Number (BIN). IP address location is also compared to the billing and shipping addresses to determine if the order should be flagged.

Order Validation assigns individual quality scores to each input and a composite quality score to the overall transaction. You determine your quality score threshold, which is used to flag suspicious transactions for your team to review or reject.

Here are a few examples of transactions that might be flagged for additional review:

  • Phone number not matching the name and state on the order
  • Issuing bank (via BIN) in a different country than shipping address
  • IP location not close to shipping address

Your team can review and manage flagged transactions before the order is fulfilled.

Chargebacks

A chargeback occurs when a customer disputes a transaction and their payment is returned to their account. Sometimes this is referred to as “friendly fraud,” meaning it was a misunderstanding on the part of the consumer. Perhaps they didn’t read the fine print to see that they were signing up for a subscription with recurring fees, for example.

Frequently, chargebacks are caused by a fraudster either using stolen financial information to make a purchase or by lying and claiming they never received the product. Friendly or not, chargebacks cost your customer service team time, both interfacing with the customer and researching the issue.

Chargebacks are particularly nasty because you lose product, incur shipping costs, chargeback fees AND they hurt your standing with creditors over time. If your business reaches the high-risk threshold for your industry your processing rates will increase, or worse – your processor could drop you.

DOTS Order Validation can again flag risky transactions by cross-checking customer information and location elements through more than 200 proprietary tests, resulting in a quality score based on the validity of the information. Order Validation also provides a record of the order with all the information you need to argue a chargeback should one occur.

Order Validation also helps your customers correct typos in shipping info at the point of entry, so you can avoid chargebacks from misdelivered shipments and any related customer service headaches.

High Risk Cards

With the rising sales of prepaid credit cards and gift cards, the frequency of scams involving these cards has risen. There are many types of prepaid and gift card fraud, involving both the sale or loading of cards, and using prepaid or gift cards to make a purchase. High risk cards can cost you on either end of the transaction.

High risk cards can also hurt you if your product or service is offered on a payment plan. The first payment on a prepaid card might be approved, but subsequent payment transactions could return insufficient funds. Not only do you have product loss, you’ll incur additional costs attempting to collect the debt internally or settle for a fraction of the debt through a collections service, if you can collect at all.

DOTS BIN Validation uses the Bank Identification Number (BIN), comprised of the first six digits of a card number, to identify the issuing bank and card-type, including those higher risk prepaid and gift cards. Cross-referencing the BIN with user phone and address information can help you identify a high-risk transaction.

Your team creates protocol to manage these transactions, such as:

  • declining prepaid cards outright at point-of-sale
  • requesting a secondary form of payment in real-time
  • simply flagging the order for review before fulfillment

BIN Validation also provides the name and phone number of the issuing bank, so you can call to verify flagged transactions.

Validation services help your team stop wasting time identifying and troubleshooting fraudulent transactions, and spend more time managing transactions flagged as high-risk before they become a problem.

It’s increasingly important to protect your business from fraudulent transactions. Implementing an API can literally stop fraud before it even begins, right at the point of sale, and in real-time. Learn more about how Order Validation or BIN Validation can help you prevent fraud and enjoy the benefits of improved customer satisfaction and more efficient resource management.

Saving More of Your Labor this Labor Day

Labor Day is much more than the traditional end of summer in America: it pays tribute to the efforts of working people. It dates back well over a century, with one labor leader in the 1800s describing it as a day to honor those “who from rude nature have delved and carved all the grandeur we behold.” And we aren’t forgetting our friends in Europe and elsewhere, who celebrate workers as well with holidays such as May Day.

As we celebrate work and the labor movement – and enjoy a long holiday weekend – we wanted to take a look at some of the ways that we help you save labor, as you try to carve grandeur from your organization’s data. Here are some of the more important ones:

Validation and more. Let’s start with the big one. For nearly two decades, the main purpose of our existence has been to take the human effort out of cleaning, validating, appending, and rating the quality of your contact and lead data. Whether your needs involve marketing, customer service, compliance or fraud prevention, these tools save labor in two ways: first, by saving you and your organization from re-inventing the wheel or doing manual verification, and second, by saving you from the substantial human costs of bad data.

Ease of integration. What is the single worst data quality solution? The one that gets implemented badly, or not at all. One of the biggest things our customers praise us for is how easy it is to implement our tools, to work almost invisibly in their environment. We offer everything from API integration and web hooks with common platforms, all the way to programming-free batch interfaces for smaller or simpler environments – backed by clear documentation, free trial licenses and expert support.

Speed and reliability. As one customer put it, “milliseconds matter” – particularly in real-time applications where, for example, you are validating customer contact data as they are in the process of entering it. Our APIs are built for speed and reliability, with a longstanding 99.999% uptime and multiple failover servers, as well as sub-second response times for many services – so you don’t waste time tearing your hair out or troubleshooting responsiveness issues.

Better analytics. Your contact data is a business asset – put it to work as a tool to gain business insight for faster, more informed decision-making and market targeting. You can target leads by demographics or geocoding, enhance your leads with missing phone or contact information, or leverage your customer base for better decision support, among many other applications.

Customer support. We recently interviewed a major longtime customer about using our products, and when we asked them about support they gave us the highest compliment of all: “We never need to call you!” But those who do call know that our best-in-class support, staffed by caring, knowledgeable experts who are available 24/7/365, represents a large savings of time and effort for our clients.

We hope you enjoy this Labor Day holiday. And when you get back, contact one of our product experts for a friendly, pressure-free discussion about how we can create less labor for you and your organization!

 

Why Our Customers Love Data Quality

Every year, February 14th is a time when our thoughts turn to things like true love, flowers, chocolates … and data quality.

In fact, there is more in common between these things than you might think. If you look at the history of Valentine’s Day, St. Valentine’s intention was to protect his fellow man. In ancient Rome, St. Valentine accomplished this by secretly marrying couples so that the husbands would not have to go to war. This is how his name became synonymous with love and marriage. Along those lines, Service Objects tries to also help our fellow man– admittedly less romantically – by ensuring your data accuracy, automating regulatory compliance, and protecting you from fraud.

Nowadays, our customers love how our data quality solutions solve the following problems:

High quality contact data. When you communicate with your prospects or customers, the cost directly links to the accuracy and validity of your contact list. When you automate the quality of this contact data – often your biggest and most valuable data asset – the ROI will warm the hearts of the toughest CFOs.

Lead validation. Does she love me or does she not? Better to find out early in the relationship whether she gave you a fake email address, bad contact information, or is otherwise giving you the slip, with validation tools that check over 130 data points to give you a numerical rating of lead quality.

Delivery accuracy. Nothing will make your customers fall out of love with you quicker than misdirected deliveries – even though in the US alone, 40 million of them don’t help matters by changing their addresses every year, while many others mistype their address at the time they order. When you automatically verify these addresses against continually updated postal databases, you help ensure a good relationship.

Compliance strategies. When government regulators come calling, they aren’t bringing you flowers. New rules on consumer privacy in the US and Europe have changed the game of outbound marketing, including stiff financial penalties for non-compliance, and sales tax policies are constantly changing. Automated compliance verification tools can help prevent problems from happening in the first place, and also provide quantifiable proof of your efforts.

Fraud prevention. Cupid isn’t the only one aiming his arrows at you. Fraudsters are constantly trying to separate you from your inventory and money, particularly during your busiest periods. We can help with solutions ranging from address, BIN, email and IP validation to tools that provide you an overall order quality score, to help keep the bad guys out.

Finally, it turns out we have one other connection to St. Valentine. In Italy, he is still commemorated by a charm known as St. Valentine’s Key, which is supposed to unlock the hearts of lovers. We have a key for you as well: a free trial key to any of our API products, yours for the asking. Happy Valentine’s Day!

Improving Customer Satisfaction Through Data Quality

“Online retailers of all sizes are constantly under attack by sophisticated fraudsters. In fact, credit card fraud costs US online retailers an estimated $3.9 billion each year.” – Geoff Grow, Founder and CEO, Service Objects

At Service Objects, we know that data quality excellence is the key to helping retailers feel confident about improving delivery rates while reducing fraud associated with vacant addresses, PO boxes and commercial mail handlers. This, in turn, helps maintain higher customer satisfaction ratings among your legitimate customers.

This video, featuring Service Objects’ Founder and CEO, Geoff Grow, will show you tools you can use to improve the deliverability of your products and combat fraud. You will learn how to validate addresses against current USPS certified address data to prevent undeliverable and lost shipments, as well as how to validate a customer’s IP address against the billing and shipping information they provide, using data from over many authoritative data sources to stop fraud before it happens.

 

Mail Servers: Where in the world…?

We love data here at Service Objects. We are constantly working to expand and improve on our datasets to further innovate our product lineup. A big part of what makes our Email Validation (EV) service so good is the data that helps drive it. When communicating with a mail server in real-time to verify an email address it helps to know what kind of mail server it is dealing with and if it is trustworthy. Just because an email address is deliverable does not always mean that it is good.  For example, an email may be disposable, vulgar or worse yet, a spamtrap.

Our Email Validation service already keeps track of mail server behavior patterns for millions of domains, which allows us to identify and flag mail servers with malicious activity or servers that have a high association with malicious activity.  In addition to monitoring behavior patterns, we are now focusing on determining the geographic location of the email servers.

What benefits does identifying mail server location offer?

Email addresses can be sent and received from anywhere in the world. They are not anchored to one physical location, and at a glance, one cannot easily discern its geographic origin. Even email addresses with a country code for a Top Level Domain (TLD) can have a global presence and may have servers located in multiple countries.  Fortunately, mail server location data can be derived and aggregated from some of our other datasets. This allows our Email Validation service to better identify potentially malicious mail servers and flag servers from known geographic hot spots.

In addition to helping identify problematic email servers, mail server location data can provide additional insights and benefits. From a marketing and administration perspective, the mail server location data can be used to help identify and organize email addresses for a particular region. The location information can also be used to gain business insights about a company and its location(s). At Service Objects, we are using the additional information to further enhance some of our other services, such as Lead Validation.

Challenges to identifying mail server location information

There are a number of challenges to accurately identifying mail server location information. First, we are identifying the mail server locations of a domain, not attempting to identify where an email message was sent from. This would require more than just a simple email address. However, the location data can be used to help cross-check and verify the legitimacy of an email message. For example, an email message is received, and the headers say that the message was sent from Gmail.com. However, the server IP address in the header does not match any of the known Gmail mail server locations, so chances are the message was spoofed and that it is spam or part of a phishing scam.

Second, trying to identify all of the mail servers for a particular domain is not something that can be done quickly enough for a real-time service where end-users expect sub-second response times. Real-time communication with a mail server can often take several seconds, but trying to identify all the mail servers for a domain from around the world can sometimes take several minutes. For this reason, our DOTS Email Validation service does not include mail server location identification in its suite of real-time checks. Instead, the service relies on background systems that have already collected and identified mail server locations from around the world. This ensures that the service is not bogged down by slow processes and continues to respond normally. While mail server location identification may be too slow for a real-time check, it is a daily process that we perform to ensure our list of locations is up to date. The process is also quick enough that our background processes can routinely check for any new domains that we have not come across before and process them hourly.

Third, if a business has multiple locations, then a typical DNS lookup for a domain will just tell you which mail server(s) to connect to that are closest to your area, and not necessarily tell you about their other mail servers. DNS does this to help ensure that communication is quick and efficient, that way an end-user isn’t trying to communicate with a server on the other side of the country or potentially in a different nation entirely if it doesn’t have to. Part of what makes the location identification process “slow” is that we are looking for mail servers in every major region of the world, and not just in our own local areas.

What’s going on behind the scenes

While our email validation service will currently only display the location(s) of the mail server(s) in the notes of the output when it has been identified, it is doing a lot more with that data behind the scenes. Knowing the IP Addresses and locations of the mail servers means that we can perform cross-checks against more data points in other areas. Service Objects is extremely interested in fraud prevention, so we use this data to check for associations with known proxies, VPNs, bot services and other data points that have ties to malicious activity. The data allows us to check various data driven blacklists and white hat resources against more than a simple email address and domain.  Instead, we can pull back the curtain, so to speak, and dig deeper into the mail server(s) that run behind the scenes. All, while continuing and expanding our server behavior monitorization.

With the addition of this new data, we have added additional NoteCodes to the output from our DOTS Email Validation 3 service. Below is a list of the new notes codes and that have been added:

Code Description Example
11 Countries: The ISO2 country code for the country where the mail server(s) is located. If mail servers are found in more than one country, then all country ISO2 codes will be represented in a pipe-delimited list. JP
12 Region: The region in the country where the mail server(s) is located. The region is commonly returned as a two-character abbreviation. If mail servers are found in more than one region then the value will be a pipe-delimited list of the regions. OS|TY
13 Localities: The name of the locality where the mail sever(s) is located in. If mail servers are found in more than one locality then the value will be a pipe-delimited list of all the localities. Osaka|Tokyo
14 PostCodes: The post code of where the mail server(s) is located. If multiple post codes are found, then the value will be a pipe-delimited list. 543-0062|102-0082

 

For more information about terms for international addresses and locations please check out this previous blog post.

Unlike other NotesCodes where the corresponding NotesDescriptions value will be a human readable flag to describe the note code, the value will instead contain the list of locations found.

Get started testing DOTS Email Validation by downloading a real-time API trial key or sending is a sample list to run for you.

Your Business and The Holidays: A Christmas Carol

Christmas is, of course, a major religious holiday celebrated around the world. And also one of the busiest and most profitable times of year for your business. But do you know how it first got that way?

Many people credit author Charles Dickens and his story A Christmas Carol with helping Victorian England, and later the world, see Christmas as a time of gift-giving and family connection. His mid-1800s story focused on how a lonely miser, Ebenezer Scrooge, learned to avoid the fate of his partner’s eternal torment when the ghosts of Christmas Past, Christmas Present and Christmas Yet to Come taught him to focus on what really matters – other people.

With apologies to Dickens, we feel that the three ghosts of Christmas have a valuable modern-day lesson to teach us about creating a happy holiday season for everyone, in the middle of your biggest crunch time. (Fair warning: it involves data quality.)

  • First, the ghost of Christmas Past showed Scrooge what life was like once upon a time at the holidays, when employees were happy and the company took good care of everyone – before Scrooge eventually presided over a joyless, high-pressure workplace. Just like what happens when your own performance pressures put data quality on the back burner, something a recent executive survey showed as being a major concern.
  • Next, the ghost of Christmas Present warns Scrooge that unless he changes his priorities, his neglect of others will harm people like the humble Bob Crachit and his ailing son Tiny Tim – much like your business can ruin the holidays for your customers when bad contact data causes service failures.
  • Finally, the ghost of Christmas Yet to Come paints a grim picture of a world where Scrooge is dead and no one cares – the same way that people turn away from your business and never return when you don’t deliver what you promise.

What do these lessons have to do with your own holiday rush season? Everything.

You see, most people in most businesses focus on doing their individual jobs, like entering orders or shipping products. But what about the greater mission of making sure that everyone gets what they need from you, particularly at the holidays? Too often, that is someone else’s job. Which means it becomes no one’s job. And service failures, such as packages that never arrive or contact information that isn’t correct, just become a fact of life that gets tolerated by everyone.

The ghosts of Christmas taught Scrooge that he had to learn to care, or face the consequences. The same is true for you and your business at the holidays. And the best way to care for your customers – particularly when things are at their busiest – is to put processes in place that make sure the customer comes first.

At Service Objects, we help the holidays go smoothly with tools that range from simple address validation – fueled by up-to-date real-time data from the United States Postal Service and others – all the way to complete order verification capabilities that authenticate customers and guard against fraud. We can even append information such as phone numbers to your contact data, to help you keep in touch with people, or gain geographic and demographic insight that lets you serve people better in the future. All through automated processes that run seamlessly in your applications environment.

The lesson for Christmas, then and now? Don’t be a Scrooge. And let the holiday season be a time when your business shines for everyone.

Black Friday and Cyber Monday: Opportunity and Peril

Do you sell products online? If you do, you have a great opportunity in front of you. An opportunity to boost revenues, increase market share, and create visibility for your business. Or an equally great opportunity to drive away customers, damage your brand, and lose money to fraud.

This opportunity comes once a year, in the form of the Black Friday and Cyber Monday holiday shopping period. Using figures from Adobe Digital Insights, Fortune Magazine noted that Cyber Monday 2016 was the biggest online shopping day in US history, with sales of $3.45 billion – a jump of 12% from the previous year. The traditional post-Thanksgiving shopping day of Black Friday came in a close second, with $3.34 billion of online sales in 2016, putting it on track to eventually surpass Cyber Monday as shopping channels continue to blur.

The good news is that both Black Friday and Cyber Monday each represent more than three times the volume of a normal online shopping day. And beyond sheer sales volume, these holidays traditionally draw new or annual shoppers online – people who are openly searching with an intent to purchase, with a great opportunity to discover your brand and become long-term customers.

Unfortunately, it is also open season for fraudsters. Online e-commerce fraud increases sharply during the holiday season, with fraudulent transaction rates reaching a peak of 2.5% versus a normal rate of 1.6%, against an average transaction value in excess of $200. The rise of chip-enabled cards has pushed even more fraudulent activity online in recent years, with online fraud attempts rising by 31% between 2015 and 2016. And there are risks associated with your legitimate customers as well, where problems such as missed deliveries or incorrect contact information can lead to problems ranging from lost business to poor social media reviews – particularly in the spotlight of the holidays.

Here is a quick guide to making the most of your customer opportunities this holiday season:

Screen out the bad guys. Prevent fraudulent transactions by using multi-function order verification to check for things such as address validation, BIN validation, reverse phone lookup, email validation, and IP validation, returning a measure of order quality from 0 to 100 that you can use to flag potential problem orders before they ship.

Execute orders correctly. Use address validation to verify and correct shipping information against up-to-date USPS, Canada Post or international address data, to ensure every order goes to the right place on schedule.

Keep your contact data working for you. Did you know that 70% of contact data changes every year? Validating and correcting this data every time you use it in a campaign preserves this valuable contact information as a business asset.

Target your marketing. Validate the legitimacy of your marketing leads, and check for appropriate demographics such as income and geographic location, to make your outreach for the holidays as efficient as possible.

Thankfully automated data quality solutions that can be engineered right in your API, or run as convenient batch processes with your existing data, can make optimizing the value of your contact data a simple and cost-effective process. And in the process, make Black Friday and Cyber Monday a little less scary – and a lot more profitable.

Service Objects Launches Newly Redesigned Website

Service Objects is excited to announce that we have launched a newly redesigned website, www.serviceobjects.com. The redesign effort was undertaken to enhance the user experience and features a new graphical feel, enhanced content and improved technical functionality. Visitors can now more quickly find information on how Service Objects’ contact validation solutions solve a variety of challenges in global address validation, phone validation, email validation, eCommerce and lead validation. Free trial keys for all 23 data quality services can also be readily accessed.

As part of the launch, Service Objects also made significant updates to its data quality and contact validation blog, which contains hundreds of posts on topics such as fraud protection, address validation and verification, data quality best practices, eCommerce, marketing automation, CRM integration and much more. New content is published weekly and visitors can subscribe to have new content and updates sent to them directly.

“The recent launch of DOTS Address Validation International and DOTS Lead Validation International has firmly established Service Objects as the leader in global intelligence,” said Geoff Grow, CEO and Founder, Service Objects. “We redesigned our website to more prominently communicate Service Objects’ expertise in the global intelligence marketplace and continue to reinforce what is most important to our customers: in-depth developer resources, guaranteed system availability, 24/7/365 customer support and bank grade security.”

New features also include three ways to connect with our services: API integration, Cloud Connectors or sending us a list.  We hope you will take a look at our new website and blog and send us your feedback at marketing@serviceobjects.com.