Implement Device “Fingerprinting” to Combat Fraud

As the new year begins, so does the onslaught of online fraud.  Fraudsters are continually trying to find new ways to steal personal information and use it for their own good.  This is particularly an issue with Internet Retailers and their ecommerce stores.  Online Fraud is a billion dollar industry and it affects online retailers every day of the year.  There are quite a few ways out there to help retailers combat fraud such as IP geolocation,  address verification, verified by Visa/Mastercard, fraud scoring models, and much more.  One method that is fairly new to the online world is Device Fingerprinting.  This method works kind of like human fingerprints, where the machine you are on it identifiable by the online merchants servers.

There are a few ways to fingerprint a device, either by passive techniques or active.  A study was done with online purchasers asking them if they would tolerate an executable file given to them by retailers in order to identify their machine.  Most said that they would be willing to do so in order to make the ordering process and verification process much smoother.  There are a few groups out there that say this is a breach of privacy as the retailer will know certain aspects of your computer and if it has committed fraudulent acts in the past.  Most actual consumers do not think the same as they want their information secure and not have to risk fraud.

The best part of Device Fingerprinting is that there are a few companies out there that have a massive collection of identifiable computers and networks, so when a retailer signs up, they have all those computers identities to verify orders.  This could save a lot of order processing time along with money spent on combating fraud.  If the retailer knows that the machine you are one has committed fraud before, they are able to either block the order or review it more closely.  With the rampant use of proxies, IP geolocation and address verification has become useless in some cases.  Using fingerprinting will be able to get around that and identify the computer the fraudster is actually on.  This is a huge leap from how retailers used to fight fraud and we can only expect it to get better.  Keeping your customers safe should be a priority and making sure that your company takes the necessary steps to squash fraud should be at the top of any to do list.

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