E-tailers mull anti-fraud pact

Carsales, Drive and eBay could share data on fraudsters.

An informal coalition of online retailers including the Carsales network, Drive.com.au and eBay is mulling plans to share information on fraudsters who attempt to rip off consumers.

Carsales.com general manager of trust and safety Lindsay Ellen said the sites have found ways to share data without exposing sensitive corporate information.

“We wanted to own the discussion and share data with our competitors – what we had started to learn and what else was out there,” Ellen told delegates at the Security on the Move conference in Melbourne last week.

“We want to make sure the channel we work in is clean. We will share our [blacklist] and bring it into a pool.”

She said fraud was considered a “dirty word” in the industry and there was previously little discussion of the problem.

The retailers were also discussing ways to share the data with law enforcement agencies.

The concept of the coalition was formed on the coattails of significant anti-fraud efforts undertaken by the then besieged e-tailers.

Carsales began to fight back against fraud in late 2010. Back then, staff combated a rising incidence of fraud within its 250,000 advertisements by manually reviewing every listing, image and edit posted online.

Up to 900 fraudulent advertisements were posted each month. Scammers would also pose as sellers in a series of common but successful scams.

In September, Carsales recruited assistance from an anti-fraud specialist, who cannot be named for commercial reasons.

It purchased an intelligence tool that collated fraud data and built a blacklist of known scammers.

“With this tool we were able to aggregate data really quickly and identify whether an ad is good or bad," Ellen said.

The technology, applied across the entire Carsales network, is able to wipe out a string of ads based on device identification where a known bad device is reused to post scam ads.

About two or three fraudulent advertisements make it onto the Carsales website each month, Ellen said. The company had similar success with filtering seller leads.

She said the tool provides enough insight to predict what product scammers will target, adding that they can almost “toy” with them.

Carsales has also introduced seller SMS verification and virtual telephone numbers to protect buyers.

The anti-fraud effort has also dropped credit card chargebacks by 90 percent. Chargebacks were a fee issued by card holders resulting from failed fraudulent transactions.

Ellen said fraudsters were now attempting to post fraudulent ads over the telephone in “brazen attacks” in which counterfeit driver's licences and personal details taken online were supplied.

In response Carsales has increased its identity requirements needed to post advertisements.