The Worldwide E-Commerce Fraud Prevention Network, whose members include Amazon.com, American Express, Buy.com and Expedia.com, announced the launch Monday of MerchantFraudSquad.com,a new site dedicated to combating online fraud.
MerchantFraudSquad is the first initiative of the Network, a non-profit organization formed last fall. Since the coalition’s launch, more than 375 online businesses and organizations have signed on as members.
“The number of companies that have joined the Network over the last three months indicates there is a broad interest in learning more about combating online fraud,” said Network co-chair Travis Fagan, Buy.com’s vice president for customer support. “As more merchants use our site to get educated and adopt fraud prevention practices that fit their businesses, we hope they will see a meaningful reduction in fraud losses.”
The new site will be the focal point of the Network’s goal to provide a clearinghouse for information about the best fraud prevention practices, software vendors, security seminars, law enforcement organizations and fraud prevention trends.
“Combating online fraud represents a huge challenge, since merchants can be vulnerable to a wide range of criminal tactics, even if their own Web sites are secure,” said Network co-chair Jennifer Bennett, the vice president for customer service strategy for American Express.”The Network seeks to identify these vulnerabilities and provide smart solutions for fighting back.”
Education for Prevention
One of the main concerns for coalition members is that merchants often bear the cost of fraud when stolen credit cards are used to purchase goods at their sites.
A report released last week by eMarketer found that more than 34 percent of Internet users have been targeted by a Web-based privacy or security breach, and estimated that the average fraudulent transaction costs roughly US$600 per incident.
To help promote consumer confidence in e-commerce, MerchantFraudSquad will also include tips for shopping safely online.
“Given the concern about merchant online fraud and its impact on e-commerce, there is clearly a need for more information and education,” said Howard Mendelsohn, controller of Expedia.com. “Helping merchants understand what constitutes good fraud prevention practices in the marketplace today will contribute to security of e-commerce as a whole.”
As part of the launch, the coalition released five recommended tips for e-commerce fraud prevention:
- Using real-time authorization from credit card companies
- Employing address verification systems
- Using credit card verification codes
- Purchasing rule-based detection software
- Using predictive statistical models to create profiles of what typical fraudulent transactions look like
“From a merchant standpoint, software solutions must be cost effective, compatible with existing transaction processes, and recognize privacy standards,” the Network said.