Practical Fraud Prevention

Chapter 1. Fraudster Traits

That voodoo that you do so well…

Cole Porter¹

Aristotle said that something should be described as “good” if it fulfills its purpose. A good knife, for example, would be one that cuts well. With all due respect to the ancient philosopher, we’re going to completely break with this way of looking at things.

It’s common in fraud fighting to talk about a bad card, bad IP, bad address, and so on, and it’s an easy way to communicate. Everyone knows what you mean: you’re saying a card (or IP or address) has been linked in the past to fraudulent activity. But cards, IPs, addresses, and so on aren’t really bad, and talking about them as though they are can be confusing in the long run and may lead to unnecessary friction or false declines for good customers. The real user may still be using their credit card legitimately, even if it’s also being used fraudulently. That IP may be public, or it could be that it’s now being used by someone new. An address might have many people associated with it, most of them legitimate, or a good citizen might have moved to an address recently vacated by a fraudster.

As fraud fighters, what we’re interested in is the identity behind a transaction or an action taken online. Is this identity a real one? Is the person using it the one to whom it belongs? That’s the question at the center of almost all the key questions fraud fighters face, and it’s the context behind looking into impersonation techniques, deception techniques, ...