I thought this list of simple ways of identifying suspect transactions was interesting (from SiftScience):
- Fraudsters have stacks on stacks of cards. If the customer has multiple credit cards on file from different banks, their order is 7x more likely fraudulent.
- fraudsters dislike capital letters. if a customer wrote their billing name in all lowercase letters, the order is 2.7x more suspicious.
- Fraudsters stay (virtually) on the move. A buyer with multiple billing zip codes within a week is 30x more likely to be fraudulent.
- Fraudsters favor disposable email addresses. An email address with two or more digits is twice as likely to be fraud than one with zero or one digit.
- Fraudsters are night owls. Transactions at 2AM are 50% more likely fraudulent, while 4AM transactions are 100% more likely fraudulent.
That said, for most startups simply getting customers is what’s important and fraud isn’t an issue. In fact most would love to have enough scale that they have to start thinking seriously about fraud.