March 04, 2008

Device Reputation a Critical Component of
Fraud Management

Utilization of Shared Reputation Network Enables Online Businesses to Identify Fraudulent New Accounts as They Are Created

PORTLAND, Ore. – March 4, 2008 – iovation, the device reputation authority for the Internet, today highlighted that client device identification is a critical technique that needs to be employed in any online fraud management strategy. The importance of client device identification and its role in online fraud management was recently highlighted in a Gartner report titled, "Best Practices in New Account Fraud Detection."

"Device-based fraud management and a shared device reputation infrastructure plays such a critical role in identifying online fraud and abuse that businesses not using it are limiting their ability to stop fraud from occurring or re-occurring on their sites," said Scott Olson, vice president of marketing at iovation. "Device intelligence allows fraud managers to go straight to the source and see devices that have been used for fraud. By harnessing the power of a shared device reputation network, companies are able to identify known fraudulent devices in their network, as well as new accounts before they are opened based on unique identifiers and a fraudulent device's past history."

Stopping fraudulent transactions has been difficult because the threshold for new account creation is low, which allows fraudsters to simply return to a site under different personal and account information. Adding to the problem is the fact that many online businesses rely solely on credit credentials and identity information when performing transaction risk analysis, which leaves out a key element in identifying fraud – the fraudster's computer. The Gartner report highlights the significant growth in using device reputation to combat online fraud.

By adopting a shared device reputation infrastructure like iovation's Device Reputation Authority™ (DRA) service, online businesses can benefit from the experiences of their peers and detect devices it have been used for fraud in the past even if that is the first time the business has ever seen that device. The combination of client device identification and a shared device reputation infrastructure provides a strong counter and deterrent to repeat fraudulent behavior. Customers sharing iovation's robust fraud and abuse network are better equipped to block fraudsters from returning to their sites, as well as prevent them from entering their online environments in the first place.