eStar fights ‘friendly fraud’ online

Internet Retailing

20th Oct 2015

E-commerce solutions company, eStar, has launched a standalone SaaS-based tool to protect retailers from fraud by automating risk analysis of online orders.

Risk Management Profiler (RMProfiler) uses patterns and analysis gained from eStar’s 12 years of analysing e-commerce fraud data to reduce fraud, from a client base including some of the largest retailers in New Zealand and Australia.

Retailers who rely solely on blacklisting credit cards which have been proven fraudulent, fail to detect dishonest behaviour by customers using their own cards. According to eStar, so called ‘friendly fraud’ scenarios are responsible for over 60 per cent of all claims, for example when a customer claims a refund from their credit card company by disputing they received the goods, claim they never ordered them, or that there was a problem with the product.

“Online fraud is much closer to home than retailers might think, and can be any purchase value made by any purchase method, and much of it originates from legitimate but dishonest buyers,” said Andrew Buxton, CEO of eStar.

“Combating online fraud requires retailers to do more than just use a reputable payment gateway and follow normal security practices with credit cards. RMProfiler makes accurate fraud prevention more cost effectively available to all Australian retailers, reducing the financial and reputational burden of fraud.”

RMProfiler applies heuristic and algorithmic analysis to instantly compare orders against risk metrics such as known fraudulent addresses, order velocity and value, customer behaviour and, payment data validation and comparison.

“Risk profiling has helped us avoid fraudulent transactions that would have been quite costly to our business,” said Debbie Gibson, owner of One Rugby and Oz Sports Direct, which is already using RMProfiler.