PacificEast's War on Fraud - Part 3

by Cindy1/7/2016 1:32:00 PM



By: Janice Stedman, Online Fraud Specialist


It’s all about the relationship

Relationships by definition are the way in which two or more concepts, objects, or people are connected, or the state of being connected.

Fraud Analysts or Loss Prevention (LP) investigators know about relationships. Every day we make decisions based on many different aspects of the relationship.  When an eCommerce order is received and the billing party is different from the ship to party, it is our job to find out the relationship between them. Sometimes it is easy; husband to wife, sister to brother, mom to child, and company owner to client. Sometimes it’s more challenging; friend to friend, guest to self at another location, or boyfriend to girlfriend. In our pursuit to find the relationship we sometimes are at a loss as to what the relationship could be and it is in those times that we normally find a bad guy. Oh, don’t get me wrong, there is a relationship there between the two parties, the one placing the order and the one receiving it. The problem is that very often no one told the card holder that he was part of this relationship too. Given the opportunity for him to know about that relationship I would guess that he or she would decline to be a part of it.  Most of us don’t like to give away our hard earned money.

So how do you find the relationship between two or possibly more parties? Well, by searching of course. Using all the tools you have at your disposal and seeing if any of the information provided crosses a path with any of the other information. One of the best places to start is with the email address.

I remember when email first came to be the next big craze. I loved hearing “you’ve got mail” when I powered up my computer and connected to the internet. Now, I cringe every time my phone chimes at me with a smile telling me the same thing. It’s my own fault really. It’s safe to say I am probably on a million marketing lists and of course every time I buy something off the internet, I may not remember to uncheck that box that states I REALLY want to receive every email you send, because you are an awesome company. However, from a fraud stand point this is a good thing. Why? Because if someone is looking to see who I am, I have a web presence.  Google your name or your email address… what did you find out about yourself today? For myself I see that I have a LinkedIn profile, a Facebook profile and yes… a Pinterest account.  Don’t judge….

When we review orders and attempt to find the relationship we have several tools at our disposal. Some are paid for because we want to be sure we are getting the best information. Others are free and found tangled up in the World Wide Web. If you are new to this gig, then consider this.  Find yourself a reverse information provider. They go by many different names, but basically what you are looking for is a way to enter in, say, an address, telephone number or email address and your provider will search their databases to see if they can find you a name, address, or phone number for that person. One of my favorites is PacificEast’s FlexiQuery service.

Taking the phone number for example and asking for it to be reversed will reveal to you some very important information even if it is a non-published number.  For instance, your provider should be able to tell you what type of phone it is. Land Line? Cell Phone?  VOIP?  Where is the area code from… does the area code match the billing parties address for city or state? This is a big one… for some reason there are a lot of bad guys who don’t do their homework and will give you a phone number that is clearly invalid. Did you know that a valid phone number cannot have an area code that begins with a zero or a one? If the second and third digits of an area code are the same, that code is called an easily recognizable code (ERC). ERC’s designate special services. e.g., 866 for toll-free service. An area code cannot end in 11 (511, 211, 411 etc.) these ERC’s are service codes and cannot be used as area codes. Armed with this information alone will help you determine if the phone number is valid or not.  Some companies reserve the right to cancel an order if the phone number is invalid. 
If the phone number provided is valid and can be reversed, you will normally be given the name of the person who pays the bill, or set up the account with the phone company. As an example, since I set up the cell phones in my household, if you reverse my husband’s cell number it comes up with my name.This is where we start building the relationship. If my husband placed the order and gave his cell number for contact, and you reversed it to see who it reversed to and get my name, since we have the same last name you can assume you have a relationship that makes sense. However, on the other side of the coin, if a person is renting an apartment and they have a couple roommates and the phone number they provided is the apartment landline, the name that reverses may be completely different than the purchaser and you will have to find a way to link the relationship between the two.

When this occurs we use other tactics to make the connection or at least remove the red flag that was just generated because of the mismatch with name and phone number. For example, we can reverse search the email address. Our service will tell us if any names or addresses are associated with it. Does that address match what’s on the order? How long has the email address been registered? This is a huge piece of information as bad guys tend to burn through email addresses and in almost every case of fraud we have seen the email addresses are normally less than a month old. If that’s the case in your situation you need to keep digging to remove the doubt created by this find. 

Reversing the address can give you all sorts of information. In paid services it will tell you the phone number and name of the person residing at this address and sometime even the name of the mortgage holder on that property  I should warn you to be careful when using free internet services such as the Whitepages or Anywho. The information returned to you here could be old. Remember, no one updates the internet. Only your paid searches will allow you to be confident that the information returned was updated as little as 24 hours from when you searched. In addition to name and phone numbers associated with addresses you can also see if the address is a business, commercial mail receiving agent or requires a unit/suite/apartment number.   If you still need more information regarding an address, search it on the web. Most all search engines these days have a map feature with satellite imagery that allows you to see a street view of the address. Very helpful if your bad guy is shipping to what you think is an apartment when indeed it is an export business. For research on homes Zillow is an awesome site that tells you the estimated value of the home or rental price. This helps us tremendously as we carry some high dollar merchandise. Therefore, it would be a red flag to send a $1,000 order to a home worth only $50,000. It has been my experience that people don’t normally spend on clothing over what they pay monthly in mortgage or rent.

By this time with the research completed using these three pieces of information (the physical address, email address and phone number), you should have a pretty clear indication or gut feeling about whether or not the order is good. Another helpful piece of information to check is the IP address. Where in the world is the computer sitting that is placing the order? Although the bad guys have ways of tricking us (so they think) an experienced analyst can dig deep enough to uncover the truth. The use of proxies has become a very popular tool for those wishing anonymity. However, corporations also use them to reduce spam for their workers as they use the internet as well, so proxies are not necessarily a bad thing.      

There are many other indicators of fraud that can be identified depending on the information you glean from each order. What I have provided here are very basic search techniques. More advanced techniques can involve such websites as Facebook and Hoovers for businesses look-ups, and many, many more. Using all that is available to you to connect the dots and find the relationship is essential. 

And always remember… if you can’t find the relationship, then you need to locate the credit card owner at a phone number you have verified as theirs and ask them if they placed the order.  It is as simple as that. 

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