Nick Wells reported a story on CNBC.com with a headline suggesting online fraud is not a bad thing.
He comments on a report from Forter, an e-commerce fraud-prevention company. Forter monitors customer transactions to determine if the purchase may be fraudulent. Forter checks the device that purchased the item, the address it is being sent to, and other information. It will then approve or deny the transaction, based on machine learning and decision making.
The data in the report shows online fraud stabilizing at about 2% of all online transactions, or 98% of all transactions are legit. The report also mentions regular customers, who are technology savvy are taking advantage of coupon and referral promotions by using proxy and vpn’s to bypass authorization controls. Some referral bonuses include free giftcards or merchandise. Using these methods to circumvent the system is online fraud.
The story concludes with Forter CEO, Mickael Reitblat saying, “A little bit of fraud helps. As long as it’s controlled, it’s okay. It’s the cost of doing business.” What he means is that if a company closes down all fraud avenues, the customer will find it more difficult to make an online transaction, which will chase them away.