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Mission accomplished: 95 eCommerce fraud operators arrested as part of international operation

My involvement in the E-Commerce Working Group bears fruit

A couple of weeks ago I reported on my involvement the E-Commerce Working Group organized by the EC3  – Europol’s European Cybercrime Centre. Once a year I spend ten days with Europol and other private companies as part of the Retail Week of Action, where we help hunt eCommerce criminals. There we are able to speed up the usual process by reporting suspicious activities directly to the authorities. Online merchants, banks, logistics companies, and financial services providers contribute individual pieces to the data and information puzzle and help put together a revealing picture for uncovering fraud in online retail.

This year we gathered again from June 4 to 15. Now, with the secret eCommerce operations having been carried out in 28 countries, the results of our work are public. And I have to say, it was worth it! The public-private partnership has resulted in the arrests of 95 professional fraud operators and members of internet-based criminal networks suspected of being behind online fraud activities. This success highlights the importance of analyzing and combining data from a wide range of institutions, merchants and suppliers in the fight to stop eCommerce fraud. It is also possible to see that risk analysis and a comprehensive risk management program are absolutely essential for any online store.

The extent of the damage caused to online stores by fraud operators is clear to see from the more than 20,000 fraudulent transactions representing an estimated 8 million euros. The digital opportunities and the massive amounts of data in online accounts oftentimes provide fertile ground for carrying out such a huge amount of illegal transactions.

Drawing on targeted risk assessments can stem such fraudulent activities. However, developing and maintaining the assessments necessary for identifying fraudulent operators is associated with occasionally significant expense. In such cases, it makes sense to draw on the know-how of an external provider such as Arvato Financial Solutions – for the simple reason that such service providers guarantee better cost-benefit ratios. Merchants (especially those with a high proportion of digital transactions) are advised to look into the opportunities afforded by outsourcing some or all of their fraud management activities. This necessitates taking a comprehensive look at the internal costs resulting from combating fraud and balancing these against the costs and benefits of outsourcing. The result oftentimes reveals outsourcing as an attractive option for many merchants.

When choosing a service provider, merchants are also advised to carefully assess whether the service package includes the basic solutions, including plausibility checks of addresses, accounts and credit card data, checks against negative lists, fetching credit rating data, and carrying out fraud screening. Some Managed Payment Services already have such services integrated as a module.

With the goal of creating a safer online environment for consumers around the world, the measures taken by Europol are combating credit card fraud by bringing together law enforcement authorities and the private sector to exchange information and develop proven methods.

As an Arvato Financial Solutions employee, I am one of 200 private partners who was involved in this year’s criminal proceedings. Not only do I think it is vital to actively disrupt fraud operators in the pursuit of their illegal activities but to also take steps in preventing them from accessing my data and the data of consumers in the first place. This means that merchants have to expend growing amounts on combating and preventing fraud while also finding a balance between securing and verifying customer transactions and maintaining customer experience and profit maximization. My recommendation is to outsource fraud management activities to a dedicated and expert third party who makes it possible to effectively combat fraud.

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