Introduction

It’s difficult to imagine just mere months ago, the term ‘flattening the curve’ was mostly foreign to us. Now it is paramount to our everyday life while navigating our “new normal.” Just like a viral infection, fraud knows no borders, no race nor religion, no socioeconomic status. No industry, segment or business is immune and its effects. While it’s not tantamount to life or death, fraud can be just as insidious. As our scientific and medical communities grapple with ways to combat new viruses, so do fraud leaders in their on-going work to outsmart fraudsters. It is a race against the clock where the enemy seems to always be a step ahead, mutating, adapting to new environments and developing a resistance to prevention measures that previously worked. Left to traditional fraud detection strategies, fraud teams struggle to scale manual detection and face reluctance for any methods that interrupt the near-frictionless experiences customers want. This article focuses on why collaborative, network-based fraud reporting is the key to fraud detection, laser accuracy and preventative success. 

What is the Emailage Network

For many businesses, fraud reporting is a public relations issue. As our economy has evolved to more digital and ecommerce-based companies, customers are more savvy about their data privacy and give their business to companies they feel they can trust. It’s headline news when a major corporation or industry suffers a data breach, or identifies frauds within its framework. It is not only the moral obligation of the company to announce the breach, but it is sound business to be transparent with customers. While the cost of data breach transparency is real, the cost of not sharing is much greater in terms of penalties and the negative impact to a brand’s value.

The vulnerability these situations create translates into a loss of competitive advantage within the industry. Besides the obvious moral obligations, what incentives do companies have to raise their hand and say: “We have identified fraud.”? What if there was a way to report fraud events in real time, anonymously? What if that reporting improved the ability to detect fraud in your organization with every new input? What if the reporting from your competitive peers was available and enriched your fraud detection even more? Emailage’s network intelligence technology does all of this by allowing companies around the globe from many industries to report fraud, providing valuable data to a global network that delivers increasingly accurate risk scoring through a shared history of transactions.

History of Fraud Detection

The global cost of fraud now exceeds $1 trillion every year, which is more than the value of the entire Dutch economy, but how did we get here? Thousands of years of human history have advanced mankind to stunning heights, but with every new advancement comes the opportunity for fraud. In more modern history, Congress passed the Federal Mail Fraud Act that made it a federally-prosecutable crime to defraud via U.S. mail. As technology advanced so did fraud tactics, Congress moved to penal code prohibiting wire fraud in 1952. With the rise of consumer credit cards, fraudsters began utilizing personally identifiable information to commit identity theft. In response, Congress passed the False Identification Crime Control Act of 1982. One of the first network-sourced internet fraud partnerships was created in 2000 between the F.B.I. and the NW3C. This partnership allowed fraud to be reported, catalogued and tracked nationally and internationally. As history teaches us, we must learn from the lessons of the past or be doomed to repeat them in the future. It is critical to deploy the most technologically-advanced fraud risk solutions in order to combat the ever-adapting fraudsters. Building on the learnings from history, in 2012, Emailage introduced its fraud detection technology based on the modern global passport: the email address. With email at the core of its fraud prevention solutions, Emailage offers an even more responsive way to identify and respond to fraud with insights from its continually growing, and improving, data consortium. 

Terms to Know

To understand the concepts around Emailage’s unique technology, it is useful to identify the solutions themselves and how they work in concert to provide unparalleled fraud detection. It is also beneficial to review common risk management terminology. 

Fraud Risk Management SolutionsBusinessman touching global network and data exchanges over the world 3D rendering

Email Risk Score

Portal 3

Digital Identity Score

Types of Fraud

Card Not Present (CNP) transactions

Account opening 

Account takeover

Synthetic ID

Promo abuse 

Advantages of Network Intelligence

Networks create synergies, remove barriers and increase speed. When leveraging the true power of a network, it’s important to ensure each component is speaking with others in real time. Your personal network is the most powerful tool to leverage on a job hunt, but if the members of your network don’t also speak to their own contacts to help promote you, your networking is woefully stunted. Siloed networks that don’t offer collaborative, real-time data sharing are doomed to be mired in time-consuming, ineffective fraud risk strategies. 

The data these silos collect and house is walled in, static and travels in a one-way direction – if at all. It is trapped, and is therefore rendered useless, or at best limited in its ability to help outsmart fraud. 

The true synergy in network intelligence happens when it protects your business once you’ve identified and eliminated a fraud risk, and it protects all the businesses in the network. Sharing data shines a light on how fraudsters are overcoming other methods of fraud prevention. This reinforces the strength of the network’s capabilities to continue to monitor and identify new threats, identifying emerging fraud behaviors and thwarting them before they get an effective foothold. 

By crowdsourcing fraud risks and alerts within Emailage’s network without having to self-identify, companies are incentivized to report fraud without competitive vulnerability. 

Network Power Case Studies 

Emailage customers who share fraud events gain the advantage of creating custom rules. Our fraud models are unique to customer transactions. 

The process begins by looking at the Emailage global network, followed by industry and fraud event trends specific to individual businesses. When email queries that result in fraud events are confirmed regularly, it allows for improved model performance through refinements to fraud models as patterns change.

This creates the basis for fine-tuning algorithms to continually improve the accuracy of risk scoring. These customizations are like looking through a magnifying glass to get a more detailed look at industry and peer trends when compared to an organization’s transactions. The more detailed the fraud sharing, the more opportunities to customize. 

How Does Emailage’s Network Intelligence Outsmart Fraud 

Emailage’s network intelligence goes beyond crowdsourcing fraud risk. Collecting data can only go so far to outsmart fraud. You need tools in place to leverage and analyze the data so it can be truly useful. 

Collaboration among the networked data is the first step. The second step is a deep and meaningful analysis of the data to dig into the fraud types, the fraudsters’ methods and what controls they have attempted to overcome. Even the most robust fraud management team with experienced analysts can’t comb through the magnitude of data collected within the network. Fraud prevention teams have practical, human and budget limitations fraudsters are willing to exploit. They work in the shadows; when one gets caught, ten more take his or her place. And they are likely to be sharing among themselves which tactics succeed and which fail — they’re improving their own models. 

How are the good guys ever able to defeat the enemy in a decidedly unfair fight? The good guys need a tool that is not subject to human constraints. The collaborative data Emailage’s network collects feeds machine-learning algorithms which can recognize patterns to outsmart fraud before it happens. This technology learns and adapts in real-time, leveraging the data in the network as a never-sleeping sentinel. With a powerful network continually improving risk score accuracy, we can see the rate of fraud “infection” begin to flatten. Fraud teams are able to concentrate their efforts on innovating new models that confidently approve more transactions automatically.

Analyzing the Network’s Power

Your company’s fraud team undoubtedly consists of exceptionally bright and innovative thinkers committed to the work of outsmarting fraud. Their expertise is the true core of your fraud prevention strategy. The network intelligence Emailage uses enhances and broadens the scope of your team’s capabilities, letting them focus on their most important work. 

Machine learning technology is a tool that is best leveraged by experienced human minds that provide context and deep-rooted meaning to the data. There are real people, experiences and tragedies behind the data. Machine learning is exceptional at ceaseless adaptation and analysis, but it can’t contextualize the real damage fraud wrecks on companies, communities and individuals.  Data collected across the network, focused and analyzed by machine learning and contextualized by fraud leaders is like an orchestra playing in concert. And the more players the better to fill the hall with harmony, or to outsmart fraud with a powerful, global network.

Additional Resources

Emailage is a leader in fraud management services with solutions tailored to myriad industries. Our Knowledge Hub is home to a wealth of content, case studies and research that supports the proficiency of our fraud management tools and services. Across industry and segment, Emailage’s network intelligence gives risk managers a leg up in their company’s effort to outsmart fraud.

Key Takeaways 

How do you outsmart a fraud pandemic? Only the power of collaboration and unwavering resolve to flatten the fraud curve can give fraud first responders the strength and power they need to identify and prevent outbreaks. This is the reality fraud leaders face every day. The collaborative intelligence of the Emailage global network is a unique tool in outsmarting fraud. 

Learn how the power of Emailage’s network intelligence can help your company outsmart fraud.

Visit emailage.com for more information.