Fraud prevention needs “400-plus rules”

With card not present fraud growing dramatically, existing processes used to tackle the problem are likely to be inadequate. According to participants in a Continental Airlines webinar, sponsored by 41st Parameter, half of systems currrently deploy fewer than 25 rules to flag fraudulent incidents, with 17 per cent using under 200.

Yet according to  Ori Eisen, founder and chief innovations officer of 41st Parameter, “any anti-fraud algorithm should consist of 400-plus rules in order to combat fraud efficiently.” He points out that CNP rose to £328 million during 2008, more than half of all card fraud losses in the UK.

“Although Chip and PIN and secure online payment systems like MasterCard Secure and Verified by VISA are useful tools in combating fraud, it is evident that there are still gaping flaws in current anti-fraud solutions currently in place – and predominantly with the number of rules used to flag fraud,” says Eisen.

He adds: “The standard fraud checks like address verification, card verification value (CVV2) match, shipping address and so on are just the tip of the iceberg. Organisations need more intelligent and intrinsic parameters, such as velocity that shows if multiple orders have been placed in a short period of time.”

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