Prosecuting the Perps: How to Ruin a Bad Guy's Day

eBook

SPONSORED BY:

PROSECUTING THE PERPS How to Ruin a Bad Guy’s Day

eBookPROSECUTING THE PERPS

http://info.kount.com/stop-ecommerce-fraud

2

Not Prosecuting Could Harm Your Business Over the Long Run .......................................................... 3

Higher Losses / Increased Chargebacks / More Manual Reviews ................................................ 4

Poor Customer Experience / Higher Overhead / Reduced Revenue & Profits ............................ 5

Building a Case ................................................................................................................................................ 6

Sending a Message. ....................................................................................................................................... 7

Case Study: Prosecuting a Perp .................................................................................................................. 8

Kount: A Strong and Trusted Partner in Fighting Fraud. ........................................................................ 9

Making it Easier to Prosecute Fraud .........................................................................................................10

Merchants are often reluctant to pursue criminal charges against fraudsters. This eBook explains why prosecution should be your default option and how to simplify the process.



3

SPONSORED BY:

Not Prosecuting Could Harm Your Business Over Long RunAt first, prosecuting fraud may seem like a hassle. But in the long-run, it will help minimize fraudulent activity as your organization builds a reputation for aggressive action (yes, fraudsters have their social networks where they share information like this).

You’ll eliminate repeat attacks—offenders will be scared off or in jail—and other fraudsters will get the message that your operation will aggressively prosecute them. The result will be fewer attacks, as fraudsters pursue easier and less dangerous targets.

What’s more, with the right fraud prevention solution, assembling the information you need to report and pursue charges can be a simple and straightforward process.

Higher Merchandise Losses1Increased Chargeback Penalties2More Manual Reviews3Degraded Customer Experience4Higher Overhead 5Reduced Revenue and Profits6



4

SPONSORED BY:

1. Higher Losses

Recover stolen goods? The only way to get stolen goods back is to file charges. Even if the value of an individual good

may not seem high enough to be worth the effort, if fraudsters are returning to your eCommerce website to repeatedly exploit vulnerabilities, the cumulative costs could be substantial.

Adding insult to injury. On top of the merchandise losses, the additional costs of chargeback fees and

penalties make your loss even greater. By aggressively pursuing prosecution, you’ll stop potential repeat offenders. Also, you’ll build a reputation that will encourage fraudsters to turn their efforts to easier and less dangerous targets.

A natural response to higher fraud. The “default” reaction to increased levels of fraud is to step up manual

reviews. This increases transaction friction, raises costs, and hurts customer experience. But by prosecuting fraudsters, you’ll stymie potential repeat offenders. Other fraudsters will get the message and give your operations a wide berth.

2. Increased Chargebacks

3. More Manual Reviews



5

SPONSORED BY:

4. Poor Customer Experience

Don’t make good customers feel bad. As you increase the number of manual reviews, it’s likely that

legitimate customers will get caught up in your net. The result could be cancelled orders due to delays caused by manual reviews. Or loyal customers might go elsewhere to avoid the hassle. Prosecute to remove as many fraudsters from the streets and reduce this likelihood.

More manual reviews means more hours and/or more people. Someone has to conduct those additional

manual reviews, right? And considering that agents are the most expensive component of the fraud prevention process, that means increases in overhead. But again, by prosecuting, you can reduce the incidence of fraud over the long run and mitigate this expense.

Bottom line? Not prosecuting hurts your bottom line. Whether it’s merchandise losses,

higher chargeback fees and penalties, reduced sales, higher overhead, or some combination, not prosecuting to reduce fraud can depress sales and earnings over the long-term. Don’t risk it, especially since solutions like Kount Complete™ make it easier to document charges.

5. Higher Overhead

6. Reduced Revenue/Profits



6

SPONSORED BY:

Building A Case...

1. CRIME. Prove there was criminal intent to deprive you of merchandise, property, goods and/or services.

Use of a stolen credit card and/or a fraudster using techniques to hide his or her true identity during a transaction are valid evidence.

2. VICTIM. Demonstrate you are victim of credit card fraud (not the issuing bank or cardholder).

A chargeback or a pending chargeback is valid proof, because financial liability shifts to the merchant for chargebacks in card-not-present transactions (mail order, telephone, fax, or Internet).

3. EVIDENCE. Provide evidence tying the fraudster to the fraudulent transaction.

Your fraud prevention solution should be able to collect the fraudster’s IP address, device location, email, billing and ship-to address(es), along with other data important to document the “digital crime scene.”

4. JURISDICTION. Contact police in the jurisdiction where goods were shipped.

Contact authorities located in the jurisdiction where the stolen goods were sent (not your local police). Also, police are more likely to investigate if you show multiple attempted/actual fraudulent orders by the same fraudster.



7

SPONSORED BY:

Sending A Message...Felony or misdemeanor? Most types of credit card fraud are considered felonies, punishable by varying degrees of incarceration or probation. Regardless of the punishment ultimately handed out, good things happen when you prosecute and send a message:

• A visit by the police to the fraudster’s location—even if no arrest is made—is a huge deterrent to them attempting future attacks on your business.

• In the event of a conviction, the opportunities for fraud by a prisoner are often reduced to zero (many jurisdictions block or severely limit online activity by inmates).

• Word-of-mouth about your aggressive posture will spread quickly within the fraudster social network, helping discourage attacks by other fraudsters.



8

SPONSORED BY:

Case Study: Prosecuting a Perp

BEFORE: detective work is difficult and time-consuming. Skip Meyers, Director of Loss Prevention at Micro Center, has a

30+ year record in law enforcement and fighting e-commerce fraud. Prior to implementing Kount, Skip was working a case against a fraudster who was exploiting Micro Center’s rapid in-store pickup option, which lets customers order online and pick up at a store within minutes...

• A fraudster was using a stolen credit card to order online, then pick up (steal) high-end Apple products, MacBook Pro notebooks, and iPads in stores. Her first targets were Micro Center stores in Kansas City and Chicago.

• Skip’s investigation lead him to the suspect’s profile on the Oklahoma Department of Corrections website (she was on parole for credit card fraud) and her Facebook page, where she bragged about “ripping off” stores with bogus credit cards and brazenly revealed her upcoming fraud targets.

• With the targeted Micro Center stores on alert, the suspect was arrested when she attempted to repeat the scam in Ohio. A search of her vehicle recovered stolen items from Micro Center, Home Depot, and others...leading to prosecution and conviction.

While successful, the investigation required significant detective work and hours of Skip’s time. What’s more, it took place when Micro Center’s e-commerce sales were growing rapidly and on-line fraud was increasing dramatically, too. This surge was outstripping in-house resources and driving more manual reviews, which were a burden and detrimental to sales.

Skip realized Micro Center needed outside expertise and resources and began looking for a partner to help stop fraud and reduce manual reviews (but not at the expense of sales). That’s how he found Kount.



9

SPONSORED BY:

Kount: A Strong and TrustedPartner in Fighting Fraud

AFTER: significant fraud and workload reduction. After implementing Kount Complete™, early detection of fraud greatly

increased Micro Center’s ability to stop and reduce repeated attempts from fraudsters. In addition, Kount’s collection of transaction data fit uniquely into the company’s strategy for pursuing fraudsters. Each piece of data collected by Kount during an attempted fraudulent transaction—IP address, device location, email, billing/ship-to address, and other anomalies—is used as evidence to build a case against the fraudster.

This documentation of the “digital crime scene” has made it easier for Micro Center to work with law enforcement agencies to apprehend credit card thieves and organized fraud rings.

Skip Meyers, Director of Loss Prevention at Micro Center says: “By increasing the risk of apprehension, we believe that fraudsters realize their opportunity to commit fraud is reduced and therefore not worth the risk. The benefits of Kount’s fraud detection platform are tremendous, and the amount of fraud information is invaluable. This proactive approach sends a strong message to criminals that Micro Center will not be an easy target.”

OUTCOMES• Successful prosecution of fraudsters• 75% reduction in CNP chargebacks• 40% reduction in CNP losses• 50% reduction in manual reviews• 0.4% chargeback rate• 25% increase in sales

(projected at 30% for this year)



10

SPONSORED BY:

In just 30 minutes, we’ll show you how Kount collects the evidence from a fraudster’s “digital crime scene” to make prosecutions easier.

About KountMerchants using Kount can accept more orders from more people in more places than ever before. For each transaction, Kount’s “decisioning” engine analyzes hundreds of relevant variables and activity across the globe in real-time providing the most accurate fraud prediction available. While reducing the risk of fraudulent activity, Kount’s intuitive business intelligence tools help merchants increase revenue opportunities in the future, thus boosting sales while reducing fraud. Kount is a single, turnkey fraud solution that is easy-to-implement and easy-to-use.

Making It Easier to Prosecute Fraud...

SCHEDULE A LIVE DEMO“Micro Center has a motto about fraud,

‘How can we ruin a bad guy’s day?’ Since

the implementation of the Kount, we have

experienced a measurable increase in

on-line sales and decrease in fraudulent

on-line transactions.”

Skip MyersDirector of Loss Prevention, Micro Center/MicroElectronics, Inc.


Law

Prosecuting the Perps: How to Ruin a Bad Guy's Day