Account takeover happens when your existing bank or credit card accounts are infiltrated and money is siphoned out. A hacked account or stolen credit card is often to blame.

The drop in account takeover may be due in part to a few different things.

Less breaches. There was a drop in data breaches from 221 million records in 604 breaches during 2009 to 26 million records breached in 404 reported breaches during 2010. Criminal hacker Albert Gonzalez and his gang were responsible for many of those hacked records and he and many of his cohorts are now in jail.

PCI standards. All those responsible for accepting credit cards are now under strict Payment Card Industry Standards rules and regulations that require a level of security that took about 5 years to implement. Today many of those merchants are doing a much better job of protecting data.

Device reputation management. Technology that checks an Internet transaction by looking at the PC, smartphone or tablet to see if it has a history of bad behavior or is high risk based on device characteristics and behavior. iovation is one such company that has blocked 35 million fraudulent transactions of this sort just last year. (more…)

Internet criminals follow a similar editorial calendar as newspaper and magazine editors, coordinating their attacks around holidays, and the change in seasons. They further capitalize on significant events and natural disasters.

On Super Sunday weekend much of the scamming taking place is designed to separate the public from their money using the Big Game as the lure. People are seeking information on the Game and are being tackled by criminals who steal the ball.

The promise of cheerleader-filled videos along with downloadable player pictures or even Big Game memorabilia will dominate the scamverse. (more…)

Distinguishing transactions with real risk from those that only appear risky is one challenge of effective fraud management. False positives can dramatically degrade fraud catch while increasing operational costs. Risk rules based on IP address, including the ability to see through proxies to unmask the real source IP address, are a good example. It’s well known that many fraudsters use web proxies to hide their source IP address. They may use proxies simply to evade recognition, to source transactions from locations that match stolen identities they wish to exploit, or to overcome rules blocking transactions from high fraud rate countries. At first blush, a transaction may seem risky if the ‘stated’ IP does not match the ‘real’ ip address. But let’s look a little closer.

There are situations where a mismatch between presented IP address and actual IP address does not indicate risk. These include certain ISPs, corporate networks, and CDN services that either require their users’ web traffic to pass through proxies or have service configurations that result in proxy-like behavior. If the IP addresses don’t match but the locations do, that can help filter out some of these false positive, lower risk scenarios. Likewise, if the IP addresses differ but the ISP is the same, proxy risk is typically low. When the IP addresses don’t match, the geolocated country or region differ, and the ISPs are not the same, that is much more likely to be an example of intentional proxy use by the end user.

Of course, legitimate site visitors sometimes use proxies too. So, proxy risk should be considered in conjunction with device reputation and other risk indicators for balanced real-time transaction decisioning.

We’re pleased to announce that iovation has been named a finalist at the International Gaming Awards (IGA) for 2011 Technology Provider of the Year.

iovation has been providing fraud prevention and anti-money laundering services to the gaming industry for the past 6 years.

In 2010 alone, iovation screened nearly 2 billion transactions and stopped over 35 online fraud attempts. The IGA has recognized iovation’s fraud prevention service for the strong results it has provided to gaming operators such as William Hill, Entraction and WagerWorks. The IGA technology provider award recognizes innovative services that have helped gaming operators increase their profitability, productivity and efficiency. (more…)

iovation knows that when your business is on the line, speed and reliability matter.  Whether it is page load times for your customers, or the speed in which we can provide you real-time reputation analysis, every millisecond counts.

There are many facets to building a highly available, lightning fast infrastructure (which we will cover in more depth in future blog posts), but today I would like to start at the very beginning with our DNS architecture.

The first thing that happens when an iovation ReputationManager 360 customer (or a customer’s end user) tries to connect is a DNS (Domain Name System) lookup to convert a name (like www.iovation.com) to an IP address (74.121.28.140).  This DNS query must complete before any further interaction with the service can proceed. (more…)

Relying on a single prevention technique for anything is risky because either the technique doesn’t work for every situation, or someone will figure out how to get around it. This certainly applies to Internet fraud, where prevention specialists work around the clock to stay multiple steps in front of the bad guys.

Fraudsters excel at hiding their true identity. True professionals in the field of fraud detection and prevention must employ a defense-in-depth approach, and iovation deploys one of the most sophisticated with a multi-tiered approach to recognize trouble when it is near. Our innovative service to recognize risk has been constantly refined over the past six years. (more…)

As we wrap up the third quarter of 2010, iovation continues to see significant growth in the total number of device reputation checks performed for online businesses, along with the number of unique devices managed in the Device Reputation Authority (DRA) database.

With only three months remaining, iovation has already increased the annual growth rate for processed transactions by 67% over 2009. With more than 3.9 billion cumulative device reputation checks processed for e-commerce, financial, travel, gaming and online communities today, we expect to break 4 billion early in Q4.

We’ve also increased the overall number of unique devices by 110% over last year. Starting in 2006 with 5 million devices in our system, we now manage more than 390 million unique devices (including PCs, Macs, iPads, iPhones, Blackberries, Android, etc.). Surpassing 400 million unique devices is just on the cusp.

With cybercrime fraud losses more than doubling in 2009, Internet-based businesses need security solutions that allow them to proactively identify and make educated decisions on all incoming transactions. Through fraud and abuse evidence submitted by our worldwide, cross-industry subscriber base, iovation ReputationManager 360 combines device and account profiles, analytics, custom reporting, real-time business rules, device anomalies, and the experience and expertise of over 2,000 fraud analysts to help customers make quick, confident decisions on every online transaction request.

When it comes to managing risk for online transactions, we get a lot of questions about how our approach compares to other commercial solutions. Establishing business rules and risk scoring in combination with device reputation ranks high among topics of interest. Simply put, iovation uses the device and transaction data available to any vendor, and combines it with the strongest database of historical device risk data available on the market today.

Risk scoring, when you boil it down, is the simple process of taking the data you have available about a given transaction and the device requesting that transaction, and measuring characteristics that would lead you to believe that it is either valid or risky. Most device-based risk scores, including those offered by iovation, incorporate common types of risk elements in their scoring. These may include:

• Velocity-based Rules – Measuring device activity in a given time frame
• Transaction Anomalies – Device characteristics that indicate the device is masking its identity, such as using an anonymizing proxy, or disabling technologies like flash

(more…)

With fraudsters better at hiding their true identities, it’s getting more and more difficult to know which online transactions to trust and which to reject. Would if you could confidently identify good transactions from the bad ones before they occurred? How valuable would this intelligence be in your ongoing efforts to reduce the risk of online fraud or abuse? (more…)

As we continue to learn more about how cyber criminals operate, online businesses continue to seek out effective countermeasures against organized fraudsters committing fraud and abuse. Trying to fight fraud alone can be a losing battle. No matter how much information your business has collected to stop criminals, there is a growing number of sophisticated fraudsters out there who are constantly changing their identities and the profile of their computers, to perpetrate fraud across a multitude of verticals.

One of the most effective ways to defend your enterprise is by working together and sharing information with other fraud teams across multiple industries. Interacting with a centralized, global network of fraud intelligence arms you with information upfront to minimize your chances of having to take that first hit. (more…)

While the hot new iPad provides an exciting platform to surf the web, exchange emails and read books, users are also using the computer tablet to access their existing accounts on social networking sites, play virtual games, and make online purchases much like they would on their home computer.

This past week, iovation has seen a rapid adoption of the iPad being used at our customer sites. We’ve seen the number of iPad transactions grow by thousands every single day since the new device was made available. And these transactions aren’t just occurring within the same industry. In fact, we’re seeing iPad transactions on a multitude of verticals including travel sites, social networks, sportsbooks, dating sites, credit issuers, MMOs and online social games. And our job is to make sure that the transactions processed are from legitimate, good customers.

Topping the list of industries where we’ve seen the most online transactions this week is online communities at 45%, with the majority on social networking sites as opposed to dating sites. The second largest group was online retail, accounting for 28% of total iPad transactions. Most of those transactions occurred on travel sites. And lastly, international gambling sites such as sportsbooks came in third, at 23% of all iovation-protected iPad transactions.

So that’s where we’re helping customers, but what information do fraud teams share within our database in order to reduce fraud losses and ensure good customers have a positive experience on their site?

iovation tracks over 30 different types of bad behavior and this segmentation is important to our customers. How they treat evidence (specific types of fraud and abuse) changes across various industries. For example, an online retailer cares about mitigating chargebacks and catching criminal activity before product goes out the door, whereas an online community cares more about stopping spam, solicitations, predators and phishing attempts, in order to protect community members and maintain a safe and trusted environment.

Our customers can customize our fraud protection service to gain control over the specific transactions and activities that they correlate with high risk. This allows them to take more business with confidence and spend less time conducting costly manual reviews.

Believe it or not, within the first week of iPad sales, we have already uncovered fraudulent activity. Over half of all transactions denied from iPads were specifically related to credit card fraud. In other words, they were fraudsters attempting to monetize stolen identities on our customers’ websites.

As iPads connect to online businesses to create accounts, submit applications and make purchases, it is very important for organizations to know whether or not the device:

• has committed fraud or abuse on their site
• has committed fraud or abuse at another business
• has relationships with other devices or accounts that have been involved with fraud or abuse
• has not been seen before, but matches the profile of other high-risk or suspect devices

As iovation’s global shared database of over 275 million devices grows, so do the reputations of iPads used to request transactions. This is important information that companies can use to determine whether or not a transaction requested by an iPad, or any other Internet device, can be trusted and just the kind of information iovation provides to its valued customers.

The FBI recently released some interesting findings about cyber crime that confirmed what we suspected all along — cyber criminals are very business-like, working together, and operate like most other businesses that are out to make a profit. In the article, “The rise of Mafia-like cyber crime syndicates,” Deputy Assistant FBI Director, Steven Chabinsky, said a number of sting operations have uncovered the various roles individuals play within a criminal organization down to the specific titles and duties.

For example, Coders write the malware. Hackers are actively searching for vulnerabilities to exploit. Fraudsters create and deploy social engineering schemes. Hosters provide safe hosting of content on servers and sites. Techies maintain the infrastructure. And Leaders are the managers who keep the team together. (more…)

For some time now I’ve been writing about the importance of businesses working together to combat cyber crime. Echoing this sentiment is retired Air Force General Dale Meyerrose, who sat down this week with The New New Internet to discuss the importance of building partnerships, the challenges of building those alliances, and the question of who is ultimately responsible for protecting critical infrastructures in cyberspace.

In the article, “Cybersecurity Partnerships are Absolutely Critical, says Gen. Dale Meyerrose,” Meyerrose, now the VP for Cyberspace Solutions at Harris Corporation, expressed his concerns surrounding cybersecurity and the economic impact of cyber crime:

“The [issue] of most concern to me is cyber crime… elements of cyber crime, particularly economically for our country, have come to the point where we need to really be concerned. There have been estimates that we’ve lost over a trillion dollars a year to cyber crime in the last couple years. And it now exceeds all other crime in terms of the amount of money.” (more…)

The security strategy of “defense-in-depth” allows a system or an organization to prevent an attack by coordinating complementary defense techniques, taking advantage of the strengths of each one while relying on the combination to shore up weaknesses in the others.  The end result is a more complex and nuanced system that is resilient to a much greater number of attacks.

In a similar vein, we can see that any single device recognition strategy on the Web is going to run into some serious limitations, mostly related to the quality and the variety of the data that can be collected from a browser.  There are a number of sources of data that we can use to construct a view of a device on the Web, but most of them can be manipulated, and all of them have problems with uniqueness.  How to build a system that is resilient to so much data uncertainty?  Yeah, I know you’re already a step ahead of me – we design in depth. (more…)

Identity fraud, and the number of its victims, continues to rise each year.

According to a recent article,  “Number of identity fraud victims jumps,” a Javelin Strategy & Research survey found that the total number of ID fraud victims in the U.S. rose to last years to 11.1 million—a 12% increase over the year before. The study also found that 2009 losses due to ID fraud totaled  $54 billion (in comparison  $48 billion in 2008).

But why, with so many anti-fraud management solutions and techniques available, does ID fraud continue to climb year-over-year? According to James Van Dyke, president and founder of Javelin, the continual evolution of technology is one of three main factors contributing to the increase of Identity fraud. Van Dyke sees online crime continuing to escalate, due to: (more…)