There has been some recent discussion in different articles regarding whether or not device identification (also referred to as device fingerprinting) constitutes a violation of privacy, in the context of fighting online fraud. The topic came up recently at a panel at RSA on the Benefits and Dangers of Device Fingerprinting. Device fingerprinting provides significant benefits for online businesses; it provides an additional factor for authentication, used by many online banks, and aides in the fight against fraud by identifying computers that have been used in the past for fraudulent activities and stopping future transactions from those systems.

The argument against this type of technology, however, is that the device information could be collected and sold, constituting a violation of privacy of the online user. What needs to be taken into consideration, however, is how device fingerprinting compares with existing identity-based fraud prevention techniques. Device fingerprinting solutions, such as the device reputation system offered by iovation, ideally work to reduce fraud while simultaneously protecting the privacy of the individual. iovation’s ReputationManager service, as an example, collects and requires no personal information from our customers. Our online service is completely incapable of assigning any online activity to an individual and we market it that way.

The reality is that device fingerprinting systems provide online businesses with some of the only fraud management tools that don’t rely heavily on personally identifiable information. Instead of decrying privacy violations, privacy advocates should be looking to embrace systems that achieve the purpose of reducing online fraud while still protecting the privacy of good online users.

Tags: device fingerprint, device identification, fraud management, fraud prevention, Online Fraud

This entry was posted on Monday, May 4th, 2009 at 10:35 am and is filed under Financial Services, Online Communities, Online Gambling, Online Gaming, Online Retail. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.