Holiday ATO: How to Catch Customers Who Are Naughty, Not Nice

Holiday ATO: How to Catch Customers Who Are Naughty, Not Nice

Ecommerce is having itself a merry little Christmas, with consumer spending up fifteen percent compared to last year during the Black Friday/Cyber Monday shopping period. But fraudsters are also having a holly and jolly holiday season, with account takeovers now accounting for 20% of fraud.

Account takeover fraud (ATO) is tough to detect because intelligent fraudsters have methods that trick ecommerce merchants into believing they’re interacting with upstanding users. The criminals use hacking, phishing and other methods to gain access to legitimate accounts and use the account holders’ registered payment information and other details connected to the account to make purchases, withdraw money and engage in other fraudulent activities. And the flurry of holiday ecommerce spending acts as an even thicker blanket under which ATO fraudsters can hide. The spike in online visitors and unpredictable spending patterns during the holidays make it nearly impossible for merchants to distinguish between criminals and trusted users. Fortunately, Santa Claus has brought machine learning to the holiday fraud fighting front.

Machine Learning: Fraud Fighters’ Greatest Gift

Though machine learning has been a talked-about concept since the mid-20th century, it has only recently become an affordable and scalable option for everyday enterprises to employ. And machine learning technology has become one of the greatest gifts in the fight against fraud — especially account takeover fraud.

Machine learning combines traditional rulesets with algorithms and big data, which makes detecting ATO as easy as overindulging in Christmas treats. ML software examines a multitude of different attributes and historical behavioural activity with increased precision and recall in order to determine fraudulent activity. The best programs deliver the results in human-friendly terms that allow fraud prevention specialists to instantly decipher whether or not ATO is happening.

Elf-Like Tinkering Is Still Needed, However

Machine learning can examine vast amounts of data and find fraud patterns and trends much quicker than humans can, but just as Santa needs his elves, ML technology needs human intelligence. As advanced as it is, machine learning cannot be relied upon completely to spot fraud and act on its own. RISK IDENT believes it’s a mix of machine learning software, expert data scientists and valuable input from our customers that most effectively puts a stop to fraud. And it’s this mix that businesses can bank on during the holiday season and beyond.

For more information on how RISK IDENT can help your business fight against ATO and other types of ecommerce fraud, contact us today at: