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Education

bile fraud: According to Website Magazine, 60 percent of overall fraud origi- credit cards) is often typical in
nates on mobile devices. The mobile channel brings special challenges the direct sales channel. The
when it comes to fraud prevention. The nature of wireless networks result can be unnecessary false
makes it easier for fraudsters to mask their true identities, which opens positives. In addition, fraudsters
greater vulnerabilities and means increased costs online for health and posing as new consultants can
beauty businesses. place hundreds of fraudulent
• Click-and-collect fraud: Retail TouchPoints reported that nearly half (44 orders with stolen credit cards,
percent) of U.S. consumers want the option to collect their purchases at a collect commissions, steal mer-
physical store immediately after purchasing online. As brick-and-mortar chandise and disappear.
health and beauty retailers have moved to offer this popular service, fraud- • False positives: A false positive
sters have followed the money. In order to avoid detection, these crime (or a false decline) is when a mer-
rings deploy gangs of low-level "mules" to visit stores to pick up multiple, chant declines a legitimate but
fraudulent click-and-collect orders. The combination of compressed time suspicious-looking order due to
frame, mobile device ordering, and reduced data for screening (for exam- fear of fraud. Customers who
ple, masked IP address, no delivery address, etc.) makes click-and-collect are wrongly rejected will often
fraud harder to detect. stop buying from the business
• Direct sales and multilevel marketing (MLM): The health and beauty that turns them away. In today's
market has a substantial percentage of orders that take place in the di- connected world of social media
rect sales/MLM channels, creating unique issues. Most antifraud systems and viral posts, one shopper's
lack the flexibility to adapt to the unique requirements of the direct sales experience with a false positive
model. Behavior that in a conventional ecommerce setting looks fraudu- can suddenly reach thousands
lent (for example, multiple orders placed from one device using multiple and thousands of customers and
potential customers, having a
much larger impact than a sin-
gle lost sale.
Don't let the threat of fraud slow your
business down. You can help your
merchant customers get the right
precautions and fraud prevention
systems in place, so they (and you)
can capitalize on the increase in
beauty business without letting fraud
get in the way.

Don Bush joined Kount as Director of Marketing
in October 2010 and became Vice President of
Marketing in December 2012. Previously, he
was Director of Marketing at CradlePoint, a
leading manufacturer of wireless routing solu-
tions in the mobile broadband industry. Don
has worked in several management roles with-
in the technology segment for over 20 years
with both hardware/software manufacturers
and as a partner in two top technology mar-
keting agencies. He has led products launches
and marketing programs for dozens of com-
panies around the world such as Citi, HP, IBM,
Kodak, Motorola and Weyerhaeuser, and he
co-authored the seminar series, Common
Launch Disasters and How to Avoid Them.
Contact Don at don.bush@kount.com or visit
www.kount.com.

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