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Janrain is the first customer identity vendor to introduce an integrated fraud detection score

By Marla Hay | Posted on May 04, 2017

Janrain is the first customer identity vendor to introduce an integrated fraud detection score

As the number of people shopping online grows, so too do cybercriminals using fraudulent accounts. These fraudsters’ tactics include spamming, phishing attacks, promo and bonus program abuse and many other new and illicit activities. All of which lead to brands losing precious revenue and even worse, customer trust. As fraud techniques become more sophisticated, organizations and brands with an online presence need to have tools at their disposal to quickly and accurately discern whether someone accessing their site is who they claim to be.

To meet the security needs of its clients, Janrain is now the first customer identity and access management (CIAM) vendor to integrate a fraud-detection score into its offering.

By immediately identifying potential fraudsters when they authenticate into a brand’s digital properties using a phone number as part of the authentication or stored as part of their profile, this real-time consumer background check adds an extra layer of protection for your brand, your consumers and your systems.

Trends in identity fraud

Brands must have the means to adequately verify and secure customers’ personal information. If not, the organization is vulnerable to fake information or other illicit tactics to commit account fraud. Advances in technology allow cybercriminals to use automated and low-effort techniques to easily spam digital properties with registration and login attempts using fraudulent identities.

According to data from the Ponemon Institute, among companies with an estimated 19 million registered users, an average 10 percent of identities (or 1.9 million) were fake.

Javelin Strategy & Research’s 2016 "Mitigating Application Fraud from Synthetic Identities," identified 3 forms of inauthentic identities:

  • Stolen/true identities: The use of accurate core personally identifiable information (PII), such as real names, dates of birth and Social Security information on fake bank accounts or credit cards.
  • Synthetic identities: The use of PII not clearly associated with an actual person.
  • Hybrid/manipulated identities: The use of a mix of accurate core PII that do not all match together, but does belong to an actual individual.

The costs to brands

Brands hit with synthetic identities face major financial repercussions following successful fraudulent activity. The Javelin report revealed the costs associated with this fraudulent activity surged from $2 billion to $2.8 billion in the U.S. alone between 2014 and 2015. These are mostly the direct costs, however there are other types of detrimental effects on the brand.

In addition to costing companies billions each year, reports of fraudulent activity seriously damage a brand’s reputation, as consumers – even those those who weren’t affected – will begin to doubt the company’s ability to maintain tight cybersecurity protocols. And those costs are not just in fines, lawsuits or lost revenue; there are hard costs associated with time and resources allocated to remediation, communication to customers and employees, and revisions to various operational processes.

Secondly, behavioral data has become crucial for producing engaging and automated marketing campaigns. Fake or stolen account information skews and distorts consumer data as it’s not representative of the behavior of actual consumers, meaning those brands will engage in mistargeted marketing, which again puts customer trust and dollars at risk.

Taken as a whole, fraudulent accounts are bad news for organizations for a number of reasons. To counter this growing risk, companies should consider the improved security measures available with Janrain Fraud Score.

How Fraud Score works

The common methods used to try and detect fraudulent activity aren’t enough. Assessments and audits, manual control systems and database monitoring take too long and require too many resources. Relying on customer complaints or spam indicators means it’s too late and the illicit activity already took place. This is where a fraud score comes into play.

When a new user registers on a company’s website or mobile app using a phone number, Janrain runs a "background check." Using phone number intelligence, artificial intelligence-based web traffic pattern analysis and extensive data culled from global information services, a reputation score is automatically assigned to the account. A high score indicates the consumer identity is a high risk for potential fraud, and the risk level decreases as the scores get lower.

Armed with a fraud score, organizations can then make policy-based decisions on how to handle the user, meaning whether to block, flag, allow activity on the account, or to request additional credentials through step-up authentication. Janrain Fraud Score is available for traditional web sites and applications as well as for mobile devices and Internet of Things (IoT) devices.

Click here to learn more about how Janrain Fraud Score can protect your customers against user account fraud or read Ovum Research’s recent On The Radar report around our new fraud detection capabilities.

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About the author

Marla Hay

Marla Hay

Director of Product Management

View all posts by Marla Hay