| | ID and Fraud Management

Not throwing good after bad

Handle fake orders and identify fraud in collection smartly

This is how e-commerce companies can avoid additional effort and costs in accounts receivable management in cases of fraud or false identity – and also improve risk management at the same time.

Collection and e-commerce – a very dynamic issue that has concerned me as a Key Account in the field of receivable management for many years. On the one hand, the focus is always on retaining the customer in the best possible way, especially when there is a delay in payment. On the other hand, it is a clear cut case of fraud. Fraudulent orders, from which young and striving e-commerce startups suffer just the same as the “old hands”. The consequences are lacking returns and the loss of the goods shipped or the service rendered. This can thwart the growth of companies and increase risk costs. But how do you even recognise a case of fraud? And what can you do in the collection process if the loss has already been incurred?

Millions of losses due to fraud
Payment for an order is still outstanding, a payment reminder has been sent, the case has been handed over for collection – and only then is it discovered that this was a fraudulent order. Due to these orders, our clients lose several millions of Euro in sales every year. As a debt service provider, we are able to detect which of these are what we call bad debt, which ultimately cause more costs if there is no intervention and the process is suspended. When we are assigned a case of fraud, it is already too late. So we asked ourselves: what can we do now? The answer is: react quickly to avoid generating additional unnecessary costs. So, why start an application with the Residents’ Registration Office in a case of fraud? Or even worse, why even start court proceedings if we are getting returned mail?

Smart Fraud Analyzer detects cases of fraud
The first and most important step is to recognize a case of fraud and the type of fraud. The most classic case is placing an order with a false identity. In the worst case, a real person, whose e-mail address was used and who will only find out that something is wrong when we make an address inquiry and make contact, will be aggrieved. In the last few years, our debt experts together with our team of analysts have been working on a new solution and have developed the innovative “Smart Fraud Analyzer”. With this solution, fraud can be identified more quickly and comprehensively, whereby we clearly detect cases of fraud in the collection process and file them with automated processes. This ensures speed in processing and avoids further losses. The “Smart Fraud Analyzer” also detects cases of suspected fraud, which are checked more closely by a team of specialists.

Reduce the rate of fraud – improve risk management
Our clients benefit from this in multiple ways: they avoid unnecessary expenses for fraud cases and reduce sales losses. The important thing, however, is that the rate of fraud for the future can be significantly reduced. With smart fraud prevention, regular fraud reports and data analysis, the internal process and risk management of our clients can be continuously adapted and optimized – and this goes far beyond prevention by creating blacklists. Statistical procedures derive fraud patterns, detect fraudulently used addresses, e-mail addresses or customer accounts in countless variations. Overall, this allows us to make the issue of internet fraud more tangible and more avoidable.

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