Fraud fighting service

The foundation for security and enterprise management

Next month at the European Identity Conference I'll be talking about Risk Management ("Risk Management for Better Health, Fiscal and Physical"). In doing some research for that keynote, I came across a company which hosts what they call a "fraud fighting" service, but which comes under the risk management heading and just might be the pre-cursor to a type of service we've only thought of as "pie in the sky" until now.

<aside> "Pie in the sky" was coined by radical labor organizer Joe Hill in the early part of the 20th century. It’s a line from his parody song The Preacher and the Slave, which parodied the Salvation Army hymn In the Sweet Bye and Bye:

You will eat, bye and bye,
In that glorious land above the sky;
Work and pray, live on hay,
You'll get pie in the sky when you die.
It refers to something promised to you which most likely won’t ever materialize. </aside>

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Next month at the European Identity Conference I'll be talking about Risk Management ("Risk Management for Better Health, Fiscal and Physical"). In doing some research for that keynote, I came across a company which hosts what they call a "fraud fighting" service, but which comes under the risk management heading and just might be the pre-cursor to a type of service we've only thought of as "pie in the sky" until now.

<aside> "Pie in the sky" was coined by radical labor organizer Joe Hill in the early part of the 20th century. It’s a line from his parody song The Preacher and the Slave, which parodied the Salvation Army hymn In the Sweet Bye and Bye:

You will eat, bye and bye,
In that glorious land above the sky;
Work and pray, live on hay,
You'll get pie in the sky when you die.
It refers to something promised to you which most likely won’t ever materialize. </aside>

I was speaking to Ethoca president and co-founder Keegan Johnson last week about his relatively new company (they’ve been around for about three years) and their contribution to risk management. Ethoca is, essentially, a subscription service (or membership service) they call a Collaborative Fraud Management platform. The members (or subscribers) are, generally, organizations that accept (or process) online payments. The transaction data is sent to Ethoca which does two things – it stores and catalogs the data but also reports back to the member a risk assessment of the transaction. Here’s the process:

1. Person places online order with E-Retailer
2. E-Retailer securely sends the information to Ethoca
3. Ethoca searches the central database of Member experiences to find matches
4. Ethoca, based on the E-Retailer’s customized collaborative fraud-risk engine settings, analyzes the matches and returns a 4-part risk assessment including a numeric score, a recommendation, summary findings and order match details
5. E-Retailer then decides whether to accept the order, decline it or continue with further review

Ethoca will flag problem situations based on the IP address, the credit card number, phone number, shipping address and more. “Problems” include chargebacks, excessive recent transactions, inconsistent data and other trouble indications.

It’s up to each member to decide how they will use the data from Ethoca, but it does give them the data they need to make an informed decision.

If you’re an E-Retailer (or know one), this could be a prime weapon in your fraud-fighting arsenal.

But could it be the basis for something else? Come back next time and see.

Upcoming event: Another good Webinar from Kurt Johnson and the folks at Courion is coming up on Thursday April 16, at 3pm EDT entitled “Developing an Effective Identity & Access Assurance Strategy” featuring RSA’s Sam Curry (Vice President of Product Management). Register today.

Read more about security in Network World's Security section.

Dave Kearns is a consultant and editor of IdM, the Journal of Identity Management.