The presentation, “Selling Your Fraud Strategy Internally and Overcoming Challenges Deploying Third Party Tools,” will demonstrate how focusing on things like brand protection, company image, customer acquisition and retention, and boosting profits can strengthen your case when lobbying for fraud prevention projects that help reduce fraud rates and improve the health of your IT environment.

The iovation client presenting with Cory brings first-hand experience undergoing proper tool evaluation to determine which fraud tools to build in-house and which to purchase through a third party. The presentation will provide merchants that have online social aspects (user to user) with tips on how to compete against other internal revenue-generating projects. Specific points that will be covered include:

• How to match third-party tools with unique business problems

• How to decide which tools to buy and which to build in-house

• Why understanding the technical aspects of third-party tools can help you make correct decisions

• How to win budget and resources for fraud projects

• How a clean marketplace and user base contribute to your corporate brand and company health

If you are attending MRC Fall Platinum next week, be sure to set some time aside to attend this presentation.  If you’d like to talk about any specific fraud or abuse challenges that your online business is currently, I will be at Chicago meeting on Monday through Wednesday and would be happy to meet with you.

With total losses to Internet crime topping $599 million in 2009 (the latest annual statistics), educating others about the current state of fraud, evolving fraud tactics, high at-risk groups, and best practices to identify and prevent fraud, plays a critical role in helping consumers and businesses protect themselves from online fraud.

Fraud Prevention Month is also an indicator of how much still needs to be done for businesses to adequately protect themselves and their customers from today’s growing threats.

In the article, “One in five Canadian small firms insufficiently prepared to handle fraud,” a recent survey found 80% of Canadian small business owners believe their fraud-prevention strategies are enough to protect themselves from fraud. However, 17% responded that they are not prepared to handle new types of fraud tactics.

With cyber attacks becoming more widespread, the annual education and awareness campaign focuses on the growing concerns of online fraud. According to Gail Cocker, senior vice president of commercial banking at BMO Bank of Montreal, businesses that aren’t equipped to prevent evolving fraud tactics face increasing risk that could impact their business operations.

“Fraud is a direct threat to the success of our business customers. In today’s world, business owners must understand and manage multiple risks. Fraud is an operational risk that must be managed proactively.”

While education is key to raising the business community’s awareness of potential fraud risks, regularly assessing your fraud-prevention strategies is essential to making sure you are prepared for evolving fraud techniques that are continually seeking new ways to defraud your business and customers.

With regular events going on around the globe to help organizations protect their businesses and customers from more sophisticated cyber attacks and identity theft, the iovation team spent last week talking with 800 attendees at the 2011 Merchant Risk Council (MRC) e-Commerce Payments & Risk Conference, held at the Wynn Resort in Las Vegas. Take a look at the photos published on iovation’s Facebook page.

iovation provides device reputation and real-time risk evaluation solutions to help businesses representing retail, financial services, gaming and social networking determine the level of risk associated with their Internet transactions including PCs, tablets and smartphones. By performing device reputation checks on over 7.5 million daily online transactions for our customers, we help stop more than 150,00 online fraud and abuse attempts each day.

After being recognized by the international gaming and online dating communities in January as one of the top technologies for preventing fraud and increasing profitability, productivity and efficiency, we are extremely proud and honored to be recognized by industry leaders in e-Commerce as one of the most innovative fraud fighting tools for online or multi-channel retailers.

To be eligible for the awards, all entrants must be available for online or multi-channel retailers to use for the purpose of measuring, monitoring or mitigating one or more of the following: card-not-present fraud; advancing online data security; improving online payment processes; and advancing the MRC’s vision of making electronic commerce more efficient, safe and profitable.

This week, the Merchant Risk Council (MRC) announced that iovation ReputationManager 360 has been named a finalist for the 2011 MRC Emerging Technology Awards (also known as the METAwards). The awards are judged by a panel of merchants that include the likes of eBay, BestBuy.com, Go Daddy, HP, Microsoft, NCsoft, Tiffany & Co., Urban Outfitters, T-Mobile, among others. The judges recognize the most innovative and effective payment, fraud and security tools on the market. The METAwards are the MRC’s initiative to recognize the best available solutions on the market, and provide their merchant members a window into the future.

The awards will be announced at the upcoming the MRC Annual e-Commerce Payments and Risk Conference, March 23, in Las Vegas. If you are planning to attend the event, stop by our booth #217 and don’t miss our feature presentation on Thursday, March 24th at 11:00 am titled, “Circle of Fraud” with speakers Jim Houlihan of HSN, Michael Peterson of Dell, and Cory Swick of iovation.

The Merchant Risk Council (MRC) represents the largest and most influential constituency focused exclusively on making eCommerce more safe and secure. iovation is a proud sponsor of the Merchant Risk Council and brings you this interview and podcast with Executive Director, Tom Donlea.

Listen to the Podcast >

iovation: This is Scott Olson on behalf of iovation. I am here with Tom Donlea, the Executive Director of the Merchant Risk Council. Hi Tom.

Tom Donlea: Hi Scott.

iovation: Tom, as the Executive Director of the Merchant Risk Council, you lead this trade association made up of merchants, vendors, e-commerce management professionals, and law enforcement. I imagine this role gives you a great deal of insight into the key issues facing online merchants. After having just completed the Merchant Risk Council semi-annual platinum meeting and now preparing for the upcoming conference in March, is there one topic you would say is getting more attention than others?

Tom Donlea: Yes, Scott. I think for the MRC it has clearly been the economy. A lot of our merchants are increasingly focused on managing their costs and minimizing losses. They are getting a lot of pressure, so they are coming to the MRC with some very specific requests; three in fact. The first thing is they are looking for benchmarking data. They want to look at their costs, the resources they are using, and investments that they should put toward managing fraud risk.

Another piece of this, another part of the membership value, is utilizing the newest and most proven technologies available. They want to make sure that they have the right things in place, whether it is the device recognition, IP geolocation, or some of the other new technologies that are really key for the merchants.

The third thing that merchants are looking for is figuring out how to squeeze every dollar possible out of their program and their operational expenses. We are helping them connect with other members and learn about industry best practices to make sure that they are as efficient as they can be.

iovation: In recent e-commerce fraud surveys, Merchant Risk Council members show consistently lower fraud rates than the industry average. So from your experience, what are these businesses doing right?

Tom Donlea: Belonging to an organization like the MRC allows our member merchants to collaborate and then determine and discover best practices. Through our organization, the merchants have access to industry leaders. And through those presentations and forums, they are staying on top of the latest services from solution providers.

We introduce those topics and issues through webinars that we hold. We do about 20 a year right now. We hold two big conferences each year and we also have a wide enough member base from the merchant community that allows deep collaboration. Merchants from travel, gaming, the apparel industry, electronics—they are all able to gain a greater understanding of the solutions that are most widely adopted and are benefiting the bottom line, and that are, of course, appropriate for the business model.

Increasingly, merchants are looking to the MRC for advocacy. When we gather folks from the travel industry, for example, and we are hearing common issues that they have that are industry-wide issues, the MRC is positioning itself to go to battle, to cause positive change in the industry on behalf of those merchants. And we are excited to play that role.

iovation: You have followed iovation as one of the vendors and the growing interest in device-based fraud solutions for several years now. Would you say the use of this technology is now being considered a best practice for your members?

Tom Donlea: Yes, absolutely. On an annual basis, we do a fraud survey. Every year that we conduct this survey we ask our members, “What sort of third-party solutions or technology solutions are you adding to your arsenal of fraud detection tools?” Device reputation technology is one of the latest advances, and we see our merchants increasingly utilizing that type of technology to develop and enhance their fraud screening tools.

Of course, our merchants know that there is no single silver bullet that is going to eliminate fraud risk when it comes to accepting payments online. But they do know that they have got to have a diverse portfolio of tools. Not only do our members have lower fraud rates than the general industry standards for companies at the same level of revenue, but they also employ more tools than your typical e-commerce company. Through the MRC, and through meeting companies like iovation, they have learned that they must have a broad array of tools in order to meet the challenges of taking diverse payments online.

iovation: Speaking of tools and the different fraud types that your members address, most people think the Merchant Risk Council members deal primarily with financial fraud such as fraudulent chargebacks and payment fraud. What are the other risks that your Merchants are addressing?

Tom Donlea: It’s interesting that both security and authentication are becoming important issues. We’ve seen in recent headlines that data security is more and more of an issue with retailers and with consumers. The challenge for many of our e-commerce and multi-channel retailers is that they not only want to offer an inviting and convenient shopping environment for the consumer, they also want to provide the safety and security for that customer’s personal data. It’s a huge motivator for us to boost that consumer confidence in e-commerce as a channel; a focus on security is a part of that. We know that it’s important for the customers, as well as our members. The shoppers who are conducting business online, they’ve got to trust those MRC members before, during, and after placing an online transaction.

We’ve been very proactive in providing programs and events to educate retailers on the root causes of the data breaches, the regulatory issues involving the Payment Card Industry—or PCI, as we call it —and then providing them examples of compromised systems. What could have been done in advance to avoid that? Then, certainly, the remediation that happens following mistakes like the TJX breach, for example.

Authentication is another issue that we’re really focused on. Of course, authentication for financial transactions is always paramount for our members. I know iovation has lots of clients in the dating, social networking, gaming area. This has become an increasing percentage of our membership as well. For those companies, the customer experience, again, is paramount, which includes: “if I become a member of a social networking site, I want to avoid any sort of predatory behavior, phishing or any scams that are going on.” That non-financial authentication is a very, very big deal for those companies because they have to make sure that the customer experience is continually excellent.

iovation: Earlier, you mentioned that the economy was one of the major issues, and this past year, certainly, has been very challenging for a great majority of retailers across all categories. Yet the Merchant Risk Council has grown in both membership and participation. Why do you think this is?

Tom Donlea: Well, I like to think that our membership base is savvy enough to understand that it’s more vital to address fraud risk, security risk, and electronic payment issues during these hard times. They’re trying to squeeze cost out of operational systems, maximize the number of transactions they can take online, and the consumers, where they are as far as their level of safety with doing business online. MRC is bridging the gap between the merchant community and the issuer community, which includes financial institutions, who often times provide the primary interactions for that consumer in relationship to making payments online.

We’re developing forums that are allowing these communities to communicate with each other, and break down artificial walls that really do affect the consumer’s experience of placing a transaction online. We want the banks who are issuing credit cards and the retailers who are hoping to accept those legitimate transactions to have open communication and improve the industry through those efforts. We also provide active year-round forums for networking, for education, and then for advocating on behalf of our merchant members. The members that belong to the MRC, they benefit from having a distribution list that allows them to interact with their peers and competitors in a non-competitive way.

We provide benchmarking studies. We provide online learning. We have in-person conferences. We’re also expanding into Europe. I’m not sure that we talked about that but it’s very exciting for us. Then, we also have active year-round committees where folks are, again, focusing on common issues that need to be addressed by an industry group in order to improve the industry for the better. Now, more than ever, the MRC is providing resources that allow our members to address their current fraud and secured payment processes, improve their productivity, and increase profitability. Really, what we’re trying to do is make sure our members are looking out further on the horizon and are prepared for those challenges in our three program areas for fraud, security issues, and related payments on a global basis so that they’re really prepared for the future.

iovation: Certainly, the Merchant Risk Council plays a very important role in addressing online fraud and abuse. I really appreciate you taking the time today, Tom, to share with us some of the insights from the Merchant Risk Council and your members.

Tom Donlea: That’s great, Scott. We appreciate the chance to talk with you and we appreciate iovation’s involvement in the MRC.

To learn more about iovation’s fraud-fighting solutions that enable online retailers to prevent thousands of fraudulent activities each day—including credit card fraud, shipping fraud, identity theft, carding and more—watch this video, titled Preventing Fraud and Abuse in Online Retail.

Week at a Glance:

• March 9 – Opening Party at Blush Boutique, Wynn, co-sponsored by iovation
• March 10 – Platinum Member Meeting co-sponsored by iovation
• March 11 – General Conference & Exhibits (iovation booth #304)
• March 12 – General Conference & Exhibits (iovation booth #304)

On Wednesday, March 11th, iovation veteran Cory Swick will demonstrate how fraudsters are extending their scams and what online businesses can do to stop them. Emerging strategies of cybercrime will be discussed—from individuals targeting specific markets and organized rings of collusion to maturing fraud economies.

Presentation Details:

• Title:  Criminal Diversification: A Look at the Emerging Strategies of Cybercrime
• When:  Wednesday, March 11, 2009, 2:15 p.m. – 3:00 p.m. PT
• Where:  Wynn Las Vegas, Room – Lafite 6
• Speaker:  Cory Swick, Senior Enterprise Sales Executive

To meet with iovation at the event, please schedule a meeting through our website.