Step-Up Fraud Prevention Made Easy - Low-Cost Implementation of an Identity Validation System
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Step-Up Fraud Prevention Made Easy Low-Cost Implementation of an Identity Validation System
“ By leveraging the
validation software 72%
of previously suspicious
actors dropped off when
challenged to provide
their ID
”
Head of Risk, Namecheap.comExecutive Summary
This whitepaper outlines the implementation of a (Personally Identifiable Information) security, and
fraud prevention system that uses commercially increased the risk of fraudsters bypassing the
available technology from Validation.com to step-up challenge.
request ID for higher-risk transactions.
Implementing the Validation system at Namecheap
As the world’s second-largest domain registrar has been a strong fraud deterrent: 72% of fraud
by domains managed, Namecheap is a target for suspects drop off transactions when challenged
fraudsters looking to test stolen credit cards. for ID, with no revenue loss. Namecheap has
Namecheap’s fraud process has a step-up identified serial fraudsters while improving PII
challenge, which occurs when a transaction security and maintaining GDPR compliance.
receives a high risk score from automated fraud
detection tools. Validation’s patent-pending method of requesting
a user’s image, photo ID, and credit card ‘proof of
The old step-up challenge methodology involved possession’ helps Namecheap’s fraud team to
uploading images via email, which had poor PII validate customers with their own eyes.
Step-up challenge:
A fraud prevention method
where an ID request forms part
of the fraud-prevention strategy.
It can be implemented
automatically or manually.
Copyright 2019 Validation.com. All rights reserved 02The Validation System
Implementation
Namecheap elected to implement the Validation a specific range after card authorization, but
system using the manual integration method, as before charging the card, and delivering the
this is the quickest time to market. It also requires goods, the next step is to issue a step-up ID
minimal resources and technical expertise. verification challenge to the user.
The existing fraud process uses commercial A step-up ID verification requests an official ID
security tools to provide a risk score for every document (credit card, passport, driving license)
individual transaction. If the risk score falls within and can potentially include a selfie.
NEW ORDER
NO YES
IS RISK
SCORE OK?
REQUEST ID
DID NOT COMPLETE
COMPLETE
NO YES
STOP DOES COMPLETE
ORDER ID PASS? ORDER
At present, the Validation system requires no Clients who follow the link will receive a screen
fundamental change in the pre-existing process. prompt outlining the ID upload process under
Fraud agents log in to the system and generate GDPR legislation, which ensures informed
submission links, and send them over to their consent by anyone interacting with the system.
respective clients. Agents can then request multiple
types of ID based on their pre-existing criteria. The client is then asked to submit their ID.
Copyright 2019 Validation.com. All rights reserved 03Submission screens
Selfie
Take a selfie and fill the circle with
your face
SELFIE
On the submission screen, the
client is presented with a central
outline to help properly position
themselves for the photo. The
remainder of the screen is
blurred. Because of this blur,
fraudsters may inadvertently
reveal the misuse of their phones,
printouts, or screens while the
Validation process takes place.
Take a picture!
After completing the submission, an agent receives notification
via email that the client’s application is complete.
SELFIE
Fraud agents reviewing the ID submission
can now see multiple pictures before the
camera shutter initiation. They can now
review a series of pictures and either
approve, reject, or request a supervisory
review of the submission.
FAILED A submission approval would release the
order within Namecheap’s systems.
A rejection of the submission reasons of
suspected fraud would result in the user’s
transaction being denied.
Copyright 2019 Validation.com. All rights reserved 04Breakout
Implementing a system
that requires active use
of on-device cameras
creates an immediate
deterrent effect, without
a drop in sales.
28%
72%
of fraud suspects
Complete
submission
drop off Of the completed submissions
transactions
when asked for ID.
70% 30%
passed stopped.
Copyright 2019 Validation.com. All rights reserved 05Catching a
serial fraudster
Since Namecheap implemented the Validation system, multiple fraud attempts have been prevented.
Here’s an example of how our system has helped the company expose fraudulent behavior.
The submissions below are illustrations of the review screens of user-generated submissions.
SELFIE
Submission 1
SELFIE PHOTO ID
DRIVER LICEN
SE
180º
FAILED FAILED
In the first submission reviewed, a
Submission 2 transaction was flagged and
subsequently failed as the man in
SELFIE
the selfie did not match his ID.
In the second submission, the transaction
failed as his selfie was fake – it was clearly a
picture on his phone.
FAILED
Copyright 2019 Validation.com. All rights reserved 06Submission 1 Submission 2
SELFIE SELFIE
FAILED FAILED
Also, his attempt to bypass the selfie
submission stage was immediately spotted
in the Validation timeline review.
Submission 2
Visual comparison tools revealed that he
was the same individual from the first
submission.
PHOTO ID
I.D.
PERSONAL
When reviewing the ID submission,
it was clear that his ID was a picture on
his phone.
PERSONAL I.D.
PERSONAL I.D.
180º
PERSONAL I.D.
Submission 2
PERSONAL I.D.
PERSONAL I.D.
FAILED
PHOTO ID
Message:
Order XUY-SV1-323 requires
more information
A review of the timeline revealed another
transaction that was being conducted
with Namecheap, and this transaction
also failed as it was in conjunction with a
known fraudster.
Message:
Order XUY-SV1-323 requires
more information
Message:
Message: Order XUY-SV1-32
Order XUY-SV1-323 requires more information
Message:
more information
Order XUY-SV1-323 requires
more information
Message:
Order XUY-SV1-323 requires
more information Message:
Message: Message:
Message: Order XUY-SV1-323 requires
Order XUY-SV1-323 requires Order XUY-SV1-323 requires
180º
Message: more information Message:
Order XUY-SV1-323 requires more information more information
Message: Order XUY-SV1-323 requires Order XUY-SV1-323 requires
more information
Order XUY-SV1-323 requires more information more information
more information
180º
FAILED
FAIL
Copyright 2019 Validation.com. All rights reserved 07Submission 2
CREDIT CARD FRONT ONLY
The credit card number associated with this transaction
has now been added into the watchlist of another tool
for future reference.
FAILED
Submission 3
SELFIE PHOTO ID
3
PERSONAL I.D.
PERSONAL
I.D.
PERSONAL
I.D.
PERSONAL PERSONAL
I.D. I.D.
PERSON
AL
I.D.
180º
PERSON PERSONAL
AL I.D.
I.D.
PERSONAL
I.D.
FAILED FAILED
Another fraudulent transaction was detected when a flagged card was used in conjunction with another
account. Once again, a manual challenge was issued to this individual. In this case, the person submitting
their ID was the legitimate credit card holder, but he was also responsible for previous fraudulent attempts.
Consequently, the transaction was denied and his account was suspended in keeping with terms of service.
The Namecheap fraud team can now identify this type of behavior more easily without process disruption.
Conclusion
When Validation.com becomes part of an in-depth fraud prevention strategy, its step-up challenge method
has proven to be effective at exposing fraudulent behavior. As previously mentioned, since implementing
Validation.com, Namecheap has prevented multiple fraud attempts without experiencing any drop in sales.
Implementation as part of a fraud prevention strategy is seamless, requiring fraud agents only to generate
submission links in the Validation system, and forward them on to clients. The client’s ID submission – a series
of photos – can be reviewed quickly and easily for any suspicious activity.
Setting up Validation is fast, with no additional resources or technical training required for fraud teams. This
makes it an affordable measure for preventing fraud, chargebacks, and protecting customers.
Copyright 2019 Validation.com. All rights reserved 08About Validation.com
Validation.com is custom-designed client document and takeover prevention, Validation.com is quickly
management platform. With a security first focus, becoming a security tool of choice for well-known
partners of Validation.com are able to engage companies across a number of industries.
with their users to validate documents and
manage them securely. Our goal is to bring our As a product of NC Labs, the R&D arm of Namecheap
partners and their users face to face, allowing more Inc., Validation.com has carried forward the
than just documents to be validated. values and pillars of trust, truth & transparency,
With uses in the e-commerce space preventing fraud which have been core to nearly 20 years of its
and chargebacks, KYC applications, account creation operation as a domain name registrar.
Validate your
customers not just
their documents
Prevent Chargebacks KYC / Identity proofing Stop account take overs
Get in touch today Partners@validation.com or visit www.validation.com to find out more.
About Namecheap
Namecheap is an ICANN-accredited domain over 10 million domains under management,
registrar and technology company founded in Namecheap is among the top domain registrars
2000 by CEO Richard Kirkendall. It is one of the and web hosting providers in the world.
fastest-growing American companies according Namecheap offers a full selection of popular and
to the 2018 Inc. 5000. Celebrating nearly two unique domains, along with fully featured hosting
decades of providing unparalleled levels of packages, SSL security certificates, WhoisGuard
service, security, and support, Namecheap has privacy protection, and more–all at some of the
been steadfast in customer satisfaction. With lowest prices in the industry.
Find out more about Namecheap products at www.namecheap.com
Copyright 2019 Validation.com. All rights reserved 09You can also read
