All posts by Matt Tatham
Has the EMV liability shift caused e-commerce fraud to increase 33% in 2016? According to Experian data, CNP fraud increased with Florida, Delaware, Oregon and New York ranked as the riskiest states. Miami accounted for the most fraudulent ZIP™ Codes in the US for shipping and billing fraud.
Experian's fraud and identity platform, CrossCore™ won New Security Product or Service and Security Product Management / Development Team of the Year awards at the 13th Annual Info Security Products Guide’s 2017 Global Excellence Awards®.
Experian is recognized as a leading security solution provider for fraud and identity solutions in order to protect customers and financial institutions
Experian analyzed millions of e-commerce transactions from the first six months of 2016 to identify the latest fraud attack rates across the United States for both shipping and billing locations. As we approach the one-year anniversary of the EMV liability shift, the 2016 e-commerce fraud attack rates look to be at least 15 percent higher than last year’s total. Experian analyzed millions of e-commerce transactions from the first six months of 2016 to identify the latest fraud attack rates across the United States for both shipping and billing locations. Billing fraud rates are associated with the address of the purchaser. Shipping fraud rates are associated with the address where purchased goods are sent. As we approach the one-year anniversary of the EMV liability shift, the 2016 e-commerce fraud attack rates look to be at least 15 percent higher than last year’s total. E-commerce fraud is often an indicator that other fraud activities have already happened, whether a credit card has been stolen, identity fraud has occurred, or personal credentials have been compromised.
The first six months of 2016 has shown that the total credit card limits among the subprime and deep subprime credit range totaled $6.4 billion, the highest amount reported for those groups in the last five years. Our Q2 2016 Experian-Oliver Wyman Market Intelligence Report webinar will analyze the trends impacting consumer credit decisions in the current economy. The data is from the latest Experian Market Intelligence Brief report.
Experian has been selected as one of the leading players in the fraud detection and prevention space in Juniper Research’s Online Payment Fraud strategies report.
We are excited to announce that Experian Fraud and Identity Solutions is presenting at FinovateFall 2016! Finovate conferences showcase cutting-edge banking and financial technology in a unique demo-only format. Held twice a year, the conferences bring together the leaders from top financial institutions, fintech companies, investors from around the globe, and fintech media to share and promote the most innovative financial technology solutions. \"Experian’s Fraud and Identity Solutions is a leader in customer-centric identity and fraud solutions, providing fraud management solutions to some of the world’s largest brands in financial services, insurance, and retail,\" said Adam Fingersh, general manager and senior vice president of Fraud and Identity Solutions in North America. \"We will introduce our Fraud and Identity Solutions and promote our newly released CrossCore platform. CrossCore puts more control in the hands of fraud teams to adapt and deploy strategies that keep up with the pace of fraud while reducing burdens on IT and data science teams.\" Fingersh and John Sarreal, senior director of Fraud and Identity product management at Experian, are presenting the 7-minute demo focusing on the key CrossCore capabilities, and how CrossCore manages fraud and identity services through its flexible API; open, plug-and-play platform; and powerful workflow and strategy design capabilities. In Forrester’s 2016 “Vendor Landscape: Mobile Fraud Management”, Experian Fraud and Identity Solutions was cited as having the most capabilities and one of the highest estimated revenues in total fraud management in the market, between $200 million and $250 million. Join us for the event on September 8-9 in New York. Experian also has an exclusive 20% off discount code (Experian20FF16) to get even more savings! For more information on the event or to view videos of previous demos, please visit finovate.com.
Experian cited in Mobile Fraud Management Solutions report from Forrester as having the most capabilities and one of the highest estimated revenues in total fraud management
Industry’s first smart plug-and-play fraud platform allows companies to connect their own solutions, Experian products and third-party vendors in one place to better protect their customers from fraud threats Experian unveiled the fraud and identity industry’s first open platform designed to catch fraud faster, improve compliance and enhance the customer experience. Experian’s CrossCore™ gives companies an easier way to connect any new or existing tools and systems in one place, whether they are Experian, internal or third-party partner solutions. This “plug-and-play” capability allows companies to rapidly adapt to changing conditions and risks. “Our clients have expressed frustration over the lack of a truly holistic industry solution that delivers the level of confidence and control they need without requiring a massive multiyear project to replace everything they have,” said Steve Platt, global executive vice president, Fraud and Identity, Experian. “New fraud threats, updates to regulatory requirements and customer expectations for a hassle-free experience are making it challenging for fraud and compliance teams to keep up. CrossCore will give them the flexibility they need to balance customer protection with customer experience.” The CrossCore open platform enables organizations to manage services through a common access point that supports a layered approach to managing risks across providers. CrossCore includes powerful workflow and strategy design capabilities that allow fraud and compliance teams to create and adapt strategies based on evolving threats and business needs. This helps them to respond more quickly and reduces the burden on IT. Fraud and compliance teams must constantly respond to new fraud threats and changing regulatory requirements by implementing new tools on top of existing solutions. “A layered approach is imperative, because fraudsters can break through each layer individually, but they will face greater barriers with each additional layer imposed,” said Avivah Litan, vice president and distinguished analyst, Security and Privacy, of Gartner.[1] Over time, as layers have been added and fortified, systems have become increasingly complex, expensive to integrate and difficult to manage, often increasing customer friction. A key feature of the CrossCore fraud platform is the ease of integration with third-party partner solutions. At launch, CrossCore will support fraud and identity services provided by third-party partners, including Acxiom® (Identity Solutions), TeleSign and many others already integrated with Experian solutions, with more being added to the platform. Previously, integrating third-party solutions required tremendous time and effort, which often challenged in-house teams to execute in a timely, efficient manner. Through CrossCore, the responsibility of integrating additional tools and systems moves away from those teams to the platform itself, enabling clients to select best-in-class solutions from multiple providers without creating a strain on resources. Al Pascual, senior vice president, research director and head of fraud & security for Javelin, said, “There are so many great niche solutions to work with, and new ones come out almost every day. To really have a world-class approach, the client has to put all those little things together, because there never will be one vendor who does it all. The market challenge is about how to make it faster and easier to bring things together to enable a more dynamic and fluid approach to managing risk.” CrossCore features Common access through a flexible API connects disparate systems to improve risk controls while reducing integration cost and complexity An open approach enables clients to connect and optimize a portfolio of best-in-class solutions across Experian, third-party services and existing systems Powerful strategy design and workflow decisioning functions enable fraud and compliance teams to apply services in any combination to get the level of confidence required A modern Software as a Service (SaaS) architecture provides scalability and the ability to make strategy changes dynamically with no down time Experian, which offers fraud and identity services in more than 44 countries, developed CrossCore to address the widespread market need consistently expressed by its clients for a faster, easier way to get more out of their existing systems and add new tools to improve their customers’ experience while minimizing risk. Companies can begin accessing CrossCore immediately, with the ability to turn on Experian services through a single integration, connect their own fraud and identity capabilities with a common API and turn on new services as they are added. The initial release includes key Experian products: FraudNet for Account Opening; Hunter®, for application fraud detection; Prove-ID, for international identity verification; and Precise ID®, for U.S. identity verification, including knowledge-based authentication. (KBA). Third-party fraud and identity service providers can engage with CrossCore to connect their services. “Now, companies can implement a new approach to managing fraud and identity services — one that will give them greater control over their risk exposure and enable them to provide a safer and more enjoyable experience for their customers,” added Platt. Learn more about CrossCore at https://www.experian.com/crosscore [1]Gartner, Identity Proofing Revisited as Data Confidentiality Dies, Avivah Litan, Dec. 12, 2013; last reviewed on April 28, 2015
2015 data shows where billing and shipping e-commerce fraud attacks occur in the United States Experian e-commerce fraud attacks and rankings now available Does knowing where fraud takes place matter? With more than 13 million fraud victims in 2015,[1] assessing where fraud occurs is an important layer of verification when performing real-time risk assessments for e-commerce. Experian® analyzed millions of e-commerce transactions from 2015 data to identify fraud-attack rates across the United States for both shipping and billing locations. View the Experian map to see 2015 e-commerce attack rates for all states and download the top 100 ZIP CodeTMrankings. “Fraud follows the path of least resistance. With more shipping and billing options available to create a better customer experience, criminals attempt to exploit any added convenience,” said Adam Fingersh, Experian general manager and senior vice president of Fraud & Identity Solutions. “E-commerce fraud is not confined to larger cities since fraudsters can ship items anywhere. With the switch to chip enabled credit card transactions, and possible growth of card-not-present fraud, our fraud solutions help online businesses monitor their riskiest locations to prevent losses both in dollars and reputation in the near term.” For ease of interpretation, billing states are associated with fraud victims (the address of the purchaser) and shipping states are associated with fraudsters (the address where purchased goods are sent). According to the 2015 e-commerce attack rate data: Florida is the overall riskiest state for billing fraud, followed by Delaware; Washington, D.C.; Oregon and California. Delaware is the overall riskiest state for shipping fraud, followed by Oregon, Florida, California and Nevada. Eudora, Kan., has the overall riskiest billing ZIP Code (66025). The next two riskiest ZIPTM codes are located in Miami, Fla. (33178) and Boston, Mass. (02210). South El Monte, Calif., has the overall riskiest shipping ZIP Code (91733). The next four riskiest shipping ZIP codes are all located in Miami. Overall, five of the top 10 riskiest shipping ZIP codes are located in Miami. Defiance, Ohio, has the least risky shipping ZIP Code (43512). The majority of U.S. states are at or below the average attack rate threshold for both shipping and billing fraud, with only seven states — Florida, Oregon, Delaware, California, New York, Georgia and Nevada — and Puerto Rico ranking higher than average. This indicates that attackers are targeting consumers equally in the higher-risk states while leveraging addresses from both higher- and lower-risk states to ship and receive fraudulent merchandise. Many of the higher-risk states are located near a large port-of-entry city, including Miami; Portland, Ore.; and Washington, D.C., perhaps allowing criminals to move stolen goods more effectively. All three cities are ranked among the riskiest cities for both measures of fraud attacks. Neighboring proximity to higher-risk states does not appear to correlate to any additional risk — Pennsylvania and Rhode Island are ranked as two of the lower-risk states for both shipping and billing fraud. Other lower-risk states include Wyoming, South Dakota and West Virginia. Experian analyzed millions of e-commerce transactions to calculate the e-commerce attack rates using “bad transactions” in relation to the total number of transactions for the 2015 calendar year. View the Experian map to see 2015 e-commerce attack rates for all states and download the top 100 ZIP Code rankings. [1]According to the February 2016 Javelin study 2016 Identity Fraud: Fraud Hits an Inflection Point.
Experian data shows consumers are more confident managing their credit since the recession. The Q3 2015 Experian Market Intelligence Brief was released today featuring data that highlights consumer credit card debt has now reached its highest level since Q4 2009. Credit card debt levels reached $650 billion in Q3 2015, the highest it has been since Q4 2009 when it was $667 billion. Credit card delinquency rates on outstanding balances 60 or more days past due have decreased 71 percent during the same time period. Combining those indicators with the national unemployment rate dropping 50 percent during the same span illustrates a positive economic outlook on credit card trends among lenders and consumers. “Overall credit card limits have increased 102 percent since Q4 2009 with $82 billion originated in Q3 2015,” said Kelly Kent, vice president of Experian Decision Analytics. “The increase in limits from lenders and the steady climb in credit card debt combined with exceptional delinquency rates signals greater confidence among consumers as they are showing more assurance in managing their credit since the recession. We expect to see credit card debt increase in Q4 based on historical seasonal trends driven by the holiday shopping season especially with the early positive holiday sales as a sign.” The Q3 2015 Experian Market Intelligence Brief report is now available.
Industry leading consumer credit trend data The complete picture of consumer credit trends from Experian’s database of over 230 million consumers Today we launched The Experian Market Intelligence Brief, a new quarterly report that includes more than 70 charts and data trends on loan originations, outstanding loans and delinquency performance metrics spanning three years. The report can benefit any institution and inform its strategic initiatives with industry leading consumer credit trend data across eight consumer credit segments including: Auto Bankcard Mortgage HELOC Home-equity loan Personal loan Retail card Student loan Some examples of the trends that The Experian Market Intelligence Brief provides this quarter include: Auto and student loan debt are both near the $1 trillion level The retail credit card average limit is at $2,259, the highest it has been in three years Personal loan originations are at their highest levels in three years, reaching $32.9 billion The report identifies which segments are best positioned for growth, compares year-over-year results to gauge segment health, measures the impact different consumer segments have on each segment, and analyzes delinquency trends and payment behavior to alleviate and anticipate risk. The data in the report is based on aggregated summaries of millions of depersonalized credit trade files. The new report is available for $1,195 at www.experian.com/market-intelligence-brief.
At the start of the Vision 2015 Conference, Experian® announced a new dedicated enterprise Fraud and ID business in North America. This newly established business unit allows Experian, the leading global information services company, to more aggressively address the growing variety of fraud risk and identity management challenges businesses, financial institutions and government agencies face. “The rapid progression of wide-scale fraud and data breaches have led to a significant increase in identity theft related risk, and potential fraud losses on a larger scale than ever anticipated,” said Charles Chung, president of Decision Analytics, Experian North America. “For nearly two decades, we have been helping clients solve the difficult and ever-changing problems of fraud detection and identity management. Our core expertise was further enhanced by the recent acquisition of 41st Parameter which added device identification as another important layer of sophistication to our suite of fraud detection tools. Now the creation of a new fraud business unit brings all components of our Fraud and ID services together to better serve all markets through our innovative authentication techniques, advanced analytics and Big Data insights.” Having one comprehensive operation allows Experian to deliver greater value across its various addressable markets through customized approaches that balance privacy, security and compliance requirements with client reputation, customer experience, convenience and efficiency. The integration brings together a wide set of enterprise services ranging from identity and device risk assessment and anti–money laundering to consumer identity monitoring and alerts, letting Experian continue to proactively meet client needs surrounding the complex risks they face. Dr. Jon Jones has been appointed to lead the new business unit as senior vice president and general manager of Fraud and ID for Experian North America. “Data security and fraud management affect many industries as identity data has become so compromised that authenticating consumers through traditional means is not enough to safeguard against fraud. Modern fraud risks now absolutely require Big Data assets and the proven ability to derive predictive analytical capabilities to meet these challenges,” said Jones. “Today, online and mobile commerce, and customer demands for convenience and speed are intersecting with the increasing sophistication of criminal fraud networks. Experian’s new integrated fraud business delivers next-generation holistic fraud management services, leveraging our vast data landscape to identify customers’ risk for fraud even when no threat has been detected to stay ahead of the growing market demands.” Accounting for the real risk of identity compromise over time continues with the launch of Experian’s Identity Element NetworkSM which identifies real-time fraud volume and velocity linkages across multiple industries to predict when consumers are showing risk of identity compromise. Experian monitors and predicts when seemingly random identity element linkages become meaningful risk clusters, including: When an identity likely has been compromised When an identity is victim of a data breach When a transaction is part of an identity theft scheme, particularly an account takeover When consumers’ identities are exhibiting identity theft, visible by monitoring a broad portfolio of breached or compromised consumers \"Cybercriminals continue to rapidly escalate their assault on sensitive data across a variety of industries, with no end in sight,\" said Julie Conroy, research director at Aite Group. \"This requires fraud prevention capabilities to undergo a similar rapid evolution, with a new, more advanced approach to identity management sitting squarely in the middle of risk mitigation. Simple personally identifiable information is no longer enough to verify identity; the next wave of fraud and cybersecurity services needs to employ robust data and advanced analytical capabilities in order to make faster and more informed identity decisions.\" Experian’s Identity Element Network service can be utilized through its flagship fraud enterprise platform, Precise ID®, using its data assets and analytics alongside 41st Parameter’s FraudNet to deliver a comprehensive view of the Customer Life Cycle of traditional identity, device confidence and risk assessment. Learn more about Experian’s Big Data fraud service for breach identity compromise detection for your business.
Apple Pay fraud solution Apple Pay is here and so are increased fraud exposures, confirmed losses, and customer experience challenges among card issuers. The exposure associated with the provisioning of credit and debit cards to the Apple Pay application was in time expected as fraudsters are the first group to find weaknesses. Evidence from issuers and analyst reports points to fraud as the result of established credit/debit cards compromised through data breaches or other means that are being enrolled into Apple Pay accounts – and being used to make large value purchases at large merchants. Keir Breitenfeld, our vice president of Fraud and Identity solutions said as much in a recent PYMNTS.com story where he was quoted about whether the Apple Watch will help grown Apple Pay. The challenge is that card issuers have no real controls over the provisioning or enrollment process so they currently only have an opportunity to authenticate their cardholder, but not the provisioning device. Fraud exposure can lie within call centers and online existing customer treatment channels due to: Identity theft and account takeover based on breach activity. Use of counterfeit or breached card data. Call center authentication process inadequacies. Capacity and customer experience pressures driving human error or subjectively lax due diligence. Existing customer/account authentication practices not tuned to this emerging scheme and level of risk. The good news is that positive improvements have been proven with bolstering risk-based authentication at the card provisioning process points by comparing the inbound provisioning device to the device that is on file for the cardholder account. This, in combination with traditional identity risk analytics, verifications, knowledge-based authentication, and holistic decisioning policies vastly improve the view afforded to card issuers for layered process point decisioning. Learn more on why emerging channels, like mobile payments, call for advanced fraud identification techniques.
We recently issued our Q4 2014 Experian-Oliver Wyman Market Intelligence Report that covers consumer economic trends and found that overall bankcard delinquencies (60 days past due (DPD) and greater) came in at a low 1.79% for Q4 2014. It is interesting to note the disparity when analyzing delinquency by annual spend level. Those spending $100,000 or more per year on credit cards had the lowest delinquency rate at 0.43%, while those spending $5,000 or less annually had the highest delinquency rate at 3.58%. Percent of balances 60+ DPD delinquent by annual credit card spend level* $100,000+ 0.43% $50,001—$100,000 0.51% $25,001—$50,000 0.75% $10,001—$25,000 1.23% $5,001—$10,000 1.87% <= $5,000 3.58% Overall 1.79% Card issuers can target the right customers with the right offer and drive increased portfolio profitability by using unique tools that provide insight into consumer preferences, income profiles and spend metrics. Find out more on how to discover key steps to developing a profitable bankcard campaign.
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