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What to Look for when Reviewing an Order for Potential Fraud: Part Two

As any online retailer knows, e-commerce fraud comes in many forms. Although there’s no one-size-fits-all approach to fighting the various types of fraud, knowledge is your best defense against hackers and fraudsters. Remaining vigilant helps you stay ahead of the game and prevent fraud before it happens.

If you’re already using Avolin Protect, you might have configured it to approve or cancel orders automatically through our fraud prevention workflows. But when certain orders require human oversight, you can review additional data points on the Order Review page to help guide manual decision making.

Keep reading to learn more about how to interpret customer and location data to spot signs of fraud.

Customer and location data

Another source of valuable data is information about the customer who placed the order and their location at the time of purchase. This gives you some insight into the person behind the order, not just the details about the order itself. With this extra information, you can form a more complete picture of an order’s fraud potential.

Some of this information, like a customer’s name and email address, is extremely simple yet is a key indicator of fraud. Email addresses from untrustworthy or unusual domains can be a sign of fraud in the making, especially if the customer is using an email address from a service that generates disposable email addresses for temporary use. Fraudsters often use temporary, untraceable emails to cover their tracks and avoid getting caught. A customer’s name is unlikely to raise quite as many red flags, but you may recognize the names of notable repeat buyers or scammers who have taken advantage of you in the past. If a customer is using an obvious pseudonym to hide their identity, like the name of a cartoon character or famous actor, they might be trying to hide other things from you too.

While a history of legitimate orders does lower the risk that a new order could be fraudulent, you shouldn’t let your guard down completely: A hacker could have gained access to a legitimate customer’s credentials in an attempt to commit account takeover fraud. Be sure to examine the factors discussed in this article and remain on the lookout for red flags, even for your returning customers.

Location data is an excellent source of information when you’re trying to determine your customers’ intentions. A discrepancy between a customer’s billing and shipping addresses may be a cause for concern, although there are legitimate reasons for a mismatch. For example, a customer might be shipping an item to a friend, or temporarily living in a new location that’s not associated with their credit card’s billing address. However, if the shipping and billing addresses are extremely far apart, it’s worth investigating further or sending a customer verification request for the order. Additionally, if a customer’s shipping address is in an area that you do not typically service, like a country where you cannot legally sell or ship your products, this is a major red flag and could be grounds for cancellation.

In addition to the billing and shipping addresses associated with the order, you should review the customer’s device location at the time of the transaction, then compare it to their shipping and billing addresses. A shipping and billing discrepancy might be less concerning if the customer’s device location is the same as or close to the shipping address. Though there is still always the potential for fraud, the customer is at least where they claim to be. But if a customer’s location is wildly different from their shipping or billing address, they may be operating under dishonest circumstances. This is especially true if the customer’s device is in a colocation facility or data center that’s not accessible to humans. Bots are usually behind these orders.

Look out for part three – all about device and behavioral data – coming very soon.

Not already an Avolin Protect user, but want to learn more? Get in touch.