LexisNexis has launched Retail Fraud Manager, a platform designed to help online merchants detect and combat card-not-present fraud by automating and analyzing the transaction-review process, the company announced March 23.
“Most online merchants want to get to a point to automate their transaction-review process so they can identify good orders and isolate the bad or fraudulent orders,” Dennis Becker, LexisNexis vice president, tells PaymentsSource. “We developed a fraud-prevention platform that is all about maximizing revenue and minimizing fraud losses.”
The Alpharetta, Ga.-based company’s previous fraud-management service consisted of individual components instead of an all-in-one platform, Becker notes.
Retail Fraud Manager software streamlines and organizes online merchants’ data for more efficient fraud-risk management. Participating merchants’ integrate “front-end identity risk scoring” with a workflow platform and fraud analyst review system to their existing online point-of-sale systems, Becker explains.
The integration enables merchants to quickly assess risk at the time of the transaction and automate the transaction process to minimize the amount of orders going through a manual review process, Becker says.
The platform also includes a service called Chargeback Defender Risk Score designed to help merchants detect potential fraud through a score that verifies identification data for both the billing and the shipping address, especially if they differ, Becker says.
Chargeback Defender operates alongside a system called Chargeback Defender Device Score, powered by Boise, Idaho-based fraud technology provider Kount Inc. The two systems work together to analyze each transaction, including the type of device that initiated it and the Internet protocol address.
“The system can let a merchant know that, while a transaction may come from Denver, the IP address is actually located in Romania,” meaning it most likely is fraudulent and will be flagged for further review, Becker says.
The system also takes information about the consumer and searches a historical database. Consumers may be asked "out-of-wallet" questions which are questions such as specific addresses the consumer has lived at or what phone number is associated with the address, Becker explains.
LexisNexis charges merchants based on transaction volume and on what they use within the platform, Becker says.
Online-only merchants are typically hit with 2,033 fraudulent transactions each month, according to a recent Javelin Strategy and Research report. The number is so high because merchants often are unable to determine whether the consumer placing the order is legitimate, says Jim Van Dyke, co-founder and president of Pleasanton, Calif.-based Javelin. Moreover, many issuers will not refund online merchants for “bad transactions” because there is no way to authenticate the consumer, he adds.
A fraud-management system such as LexisNexis’, however, works to “make connections and check that transactions are legitimate through historical data,” enabling merchants to catch flag fraudulent transactions before the orders are processed, Van Dyke says.
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