Turns out, crime does pay, at least for hackers committing identity theft over the Internet.

In the article, “Why Internet crimes go unpunished,” security expert Roger Grimes breaks down some interesting numbers around cybercrime, and how hackers are (to put it mildly) beating the odds. According to the FBI’s 2011 Internet Crime Report, of the more than 300,000 complaints that netted criminals $1.1 billion in 2010, law enforcement agencies convicted an average of one crook for every 50,635 victims. In other words, as Grimes eloquently states:

Steal someone’s identity and your odds of being caught are almost infinitesimal.

With all the hacks and fraud headlines 2011 will be remembered for, that’s definitely not the way we want to ring in the New Year. But as Grimes also warns, if we aren’t careful we could see history repeat itself as criminals not only continue defrauding computer users, but launch recycled attacks against the explosion of worldwide mobile device users, who could fall victim to the same old PC tricks. (more…)

Fresh off the most successful Cyber Monday, which turned into a Cyber Week or even a Cyber Month, spanning from mid-November into December, marketers and advertisers are now positioning themselves for a 2012 Mobile Tuesday.

Forbes reports, “Consumers are going mobile in large numbers, and the 2011 holiday season proved it. IBM Coremetrics recently reported that consumers increased shopping on smartphones and tablets on Black Friday. Purchases made on mobile devices accounted for 9.8% of online sales, which is up 3.2% from last year. GSI announced a 254% increase in US mobile sales on Black Friday. PayPal Mobile announced a 516% increase in global mobile payment volume over last year, and eBay Mobile reported US purchases were nearly two and a half times what they were last year.” (more…)

The Washington Post reports that this holiday season, Cyber Monday expanded into an entire week of record-breaking online shopping. From Sunday, November 27 through Saturday, December 3, consumers spent nearly $6 billion over the Internet, a 15% increase over the same week in 2010. During the first 32 days of the November-December holiday season, online spending had already reached $18.7 billion, also a 15% increase from last year.

Which begs the question: when the dust settles, how much of this uptick in online sales will equate to online fraud? It is inevitable that some consumers will detect unauthorized charges on their credit and bank accounts, and many retailers will suffer high chargebacks.

Consumers should seek out and patronize businesses that implement a comprehensive, in-depth approach to protecting customers from identity theft and financial fraud. They should also check credit and banking statements carefully, scrutinize each and every charge, and call their bank or credit card company immediately to refute any unauthorized transactions.

Retailers should consider adding device identification technology to prevent more crime upfront before product ships and stolen credit cards are charged. This emerging technology examines the PC, smartphone, or tablet being used to conduct an online transaction in order to determine whether the device’s characteristics, behavior, and history indicate a high level of risk. The leading provider of device identification and device reputation services is iovation Inc. Take a look at iovation’s stats from Black Friday and Cyber Monday.

Fraud analysts from online retailers around the world interact with iovation’s database of device intelligence daily, and through sharing information and running real-time risk assessments, they block millions of online fraudulent attempts each year.

Robert Siciliano, personal security and identity theft expert contributor to iovation, discussesCyber Monday on Fox Boston. Disclosures

Today’s traveler, whether on business or vacationing at their favorite surf or ski resort, is becoming increasingly dependent on their electronic devices. While our smartphones, tablets and laptops allow us to be more business efficient and instantly share our travel moments with family and friends, our favorite handheld devices are also vulnerable to being lost, stolen or hacked while on the road.

In the USA Today article, “Travelers at high risk of identity theft, experts say,” travelers lost a total of 11,000 mobile devices at the busiest U.S. airports this year. And that only accounts for items lost before travelers reach their intended destinations. In a study of 200 data breaches, Trustwave’s SpiderLabs found that hotels and resorts are prime targets for crooks stealing financial information, with respondents saying 38% of data thefts took place at hotels or resorts.

John Sileo, an identity theft and fraud expert who experienced identity fraud first-hand while traveling to Disney World, says people can be particularly vulnerable when they are unfamiliar with their surroundings. In his case, he suspected someone took a photo of his card number at the theme park before his bank informed him that his credit card had been shut down when someone attempted to make $3,000 worth of online charges to his card. (more…)

Helping online businesses effectively and efficiently fight online fraud and abuse is our No. 1 goal here at iovation. And according to the team at Red Herring, we have performed exceptionally. For our work in stopping more than 50 million online fraud attempts for our customers this year, we are proud to announce that iovation’s fraud prevention service has been named a finalist for the 2011 Red Herring 100 Global Award.

For the 2011 Global Award, the Red Herring editorial team selected companies demonstrating the most innovative technologies and business models originating from over 1,000 companies from over 40 nations. The companies are judged on a range of qualitative and quantitative metrics, including technology innovation, financial performance, growth criterion, management’s execution standards, potential globalization of the strategy and market share improvement.

The 2011 Global finalists will be featured during the Red Herring event taking place at the Hyatt Regency Century Plaza on December 5-7, 2012. iovation’s CEO, Greg Pierson, will be presenting iovation’s winning strategy on Tuesday, December 6th and on the last night of the event, the Global winner will be announced. If you are attending the event and would like to schedule time to chat with Greg Pierson, please email info@iovation.com.

Businesses have always been challenged with knowing whether a customer is genuine or not. It’s a critical part of any company’s daily business operations, and how they protect themselves from fraud losses that impact the bottom line. But with online merchants taking more orders from new and evolving technologies, the ability to identify the good from the bad is a great challenge.

As cyber criminals take advantage of various technologies to bypass businesses’ digital security efforts, any business that wants to succeed in today’s rapidly-changing business environment needs to have layered and effective security measures in place that allow them to know when they are dealing with a legitimate customer or a clever fraudster.  (more…)

At iovation, we understood early on that you can’t successfully fight evolving online fraud and abuse alone. It takes ongoing collaboration. In other words, authentication and security providers working together to achieve a common goal – to prevent and stop fraud. That’s been our approach from day one, and it continues today.

To expand our fraud preventative services to organizations in southern Europe, we’ve partnered with AliasLab, a leading professional services, consultancy and system integrator specializing in digital signature solutions and secure data transfer. Through this partnership, AliasLab will offer iovation’s device identification service, ReputationManager 360, along with its sophisticated Out of Band (OOB) authentication solution, SecureCall Suite, which offers strong authentication, mobile payment digital signature and mobile VAS services to banking, insurance and telcos in Italy and Southern Europe.

It goes without saying that we are very proud to be partnering with an industry leader like AliasLab. This partnership is a key for iovation’s growth largely because our companies’ authentication and device reputation solutions are extremely complimentary to each other. Together, we provide a highly effective next-generation solution for authentication and fraud management. (more…)

Good news in the fight against online fraud. The Financial Fraud Action UK recently announced that fraud stemming from card-not-present (CNP) transactions fell 8% over the same period last year.

In the InternetRetailing article, “Online shopping fraud down in first half of 2011,” during the six months ending in June, online shopping fraud including mail order and phone fraud dropped to £109.2m compared to the £118.2m in fraud losses in the first six months of 2010.

Source: Financial Fraud Action UK, Cheque & Credit Clearing Company and The UK Cards Association

While findings like these are certainly encouraging, it doesn’t mean the bad guys have given up. Far from it. While an increase in fraud protection measures play a significant role in the declining numbers, once a security hole is filled fraudsters typically turn their energies elsewhere.

DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), is quick to point out that while online shopping fraud losses are down, the fraudulent use of lost or stolen cards is up 20%.

“There has been an increase in old fashioned scams – criminals using distraction techniques and social engineering methods to get hold of people’s cards or phone banking details. We are urging everyone to be on their guard.”

As organized cyber criminals shift tactics, the ability to expose thieves who are fraudulently using someone else’s personal or financial information to purchase items online is essential to preventing fraud or abusive activity that impacts consumers and an online business’s bottom line. This is something iovation does every day for merchants that sell goods and services over the Internet.

Checking millions of daily transactions coming into our B2B customers’ websites against our dynamic, device reputation database that’s now 715 million deep, iovation’s ReputationManager 360 provides real-time device intelligence IT fraud teams need to instantly recognize and reject bad orders on the spot to prevent an array of fraud techniques and social engineering schemes designed to defraud today’s online businesses.

When it comes to studying the impact of online fraud, the discussion always turns financial. For online retailers whose business models rely on Internet transactions to generate revenue, fraud losses that range anywhere from tens of thousands to millions of dollars a year can have a significant impact on their overall business profits.

This is why combating increasingly sophisticated fraud techniques requires online merchants to identify fraudulent orders faster and boost the efficiency of their fraud management functions, without increasing overhead. For one North America retailer whose fraud losses were eating into profits and affecting the customer experience, implementing the right fraud prevention service enabled them to drop annual fraud losses from a peak of $2 million to $180,000.

In our newly downloadable case study, “Online Retailer Uses New Fraud Detection Systems To Cut Fraud Loss Rates,” Forrester Research principal analyst, Andras Cser, shares how the online merchant was able to reduce fraud loss by $1.8 million after deploying iovation’s ReputationManager 360 along with our partner’s case management system. (more…)

Every second, someone is sharing personal information about themselves over the Internet. For most online users, this data is meaningless except to the friends and well-intended recipients of the sender. But the truth is, others are watching; and they’re watching closely. For online fraudsters, personal information is carefully pieced together and used to answer security questions that allow them to break into other peoples’ online accounts to perpetrate identity theft and steal from their bank accounts.

In the article, “Fraudster used Facebook to hack bank accounts,” cyber criminal Iain Wood spent 18 hours a day online collecting information posted by his neighbors on social networking sites including Facebook to figure out passwords that would defeat online banking security checks. Prior to getting caught by police, he managed to steal more than £35,000 (approx. $55,000 USD) over a two-year period. (more…)

When it comes to adopting new technologies, every industry and market has its growing pains. For example, businesses with an increasing dependency on the Internet for sales revenues face a number of security challenges ranging from credit card fraud, phishing emails and social engineering scams. If they aren’t careful, both the business and their customers can fall victim to more complex fraud schemes.

One of the emerging markets experiencing an upswing in Internet transactions is India. According to the article, “How secure are Indian businesses?” the Internet is one of the fastest growing mediums for generating business leads for Indian small and medium-sized businesses, with 57% of SMBs now using their websites as a sales channel. (more…)