MRC Las Vegas 2023: Merchants vs. the Sophisticated Fraudster

The MRC | Merchant Risk Council brought together the payments and fraud industry last week for their annual Las Vegas conference where I had the opportunity to lead a special focus group session alongside Uline, StockX, and Macy's. During this session we broke down fraudster behavior one step at a time in order to show those in the audience what’s really behind the fraud that merchants experience on a daily basis. 

Here are a few of my highlights from the session: 

Merchants’ Biggest Challenges When Coming Up Against The Sophisticated Fraudster

Fraud is becoming increasingly sophisticated, and it’s no easy feat predicting when and how the next attack will take place. At Riskified, we see fraud emerge even within unassuming and historically “safe” segments, and once fraudsters find a way through, the exploitation is exponential. 

During our session StockX’s Director of Safety & Trust, Mark Porteous , explained that his team is focused on anticipating where the next attack is coming from. As fraud fighters, we put a lot of time and effort into eliminating vulnerabilities from current and past fraud events, but while we’re focused on that, sophisticated fraudsters have already moved on to the next scam. The key to tackling this effectively is a balanced and aligned strategy of both mitigation and threat prevention.

The speed at which fraudsters adapt was also a common challenge amongst our panel. Lindsay S. , Sr. Manager of Fraud Strategy at Macy’s, shared that trying to find a balance between mitigating new fraud while still prioritizing the customer experience, without over-declining good orders, is a challenging and constant battle.

Fraud Trends Merchants Should Be Looking Out For

Shiver also talked about call center fraud, which is a product of sophisticated social engineering. While call center orders are often assumed to be safer than other eCommerce channels because of the human interaction involved in the order, this is actually a misconception. In fact, fraudsters often use phone orders to mask their device and IP information. 

Ryan Stolarik, MBA , Finance Project Manager at Uline, shared another new trend that’s been on the rise which he referred to as “hotel fraud.” Hotel addresses are less likely to raise red flags than shipping lockers, for example, and this allows fraudsters to send small and seemingly unrelated orders to hotels across the country without merchants suspecting there is fraud involved. 

Triangulation fraud is also persistent, and so collaboration with eBay and Amazon is essential to preventing fake sellers from setting up a shop and fulfilling orders with stolen credit cards.

My Biggest Takeaway From This Year’s MRC Las Vegas 2023 

Regardless of your industry or company size, we’re all up against the same opponent. As much as we advance and adapt our technologies, fraudsters are doing the same. Preventing eCommerce fraud is an ongoing battle and MRC is a tight community of experts to leverage. One of the best ways for merchants to stay ahead in fraud mitigation is to network and connect with each other in sharing challenges, wins, and best practices.

See you next time at MRC Barcelona!

Written by: Annette Dvorak