February 10, 2018
Imagine you are the security screener at the registration desk at the recent forum in Davos, Switzerland. The forum is being hosted tonight by the U.S. ambassador for hundreds of leaders attending the World Economic Forum. Your mission is to prevent an uninvited guest from slipping into the event who has been reportedly seen in the Davos area.
“We know that the thief is an unusually tall man—precisely two meters,” the head of security informs you. “Also, he is 95 kilos, prematurely bald, and about 55-years of age. He carries a Russian passport and has a dragon tattoo on the inside of his right wrist. If you spot him, alert me immediately so that he can be questioned.”
The guests start to arrive. You check their passports against your list of invitees. The screening proceeds smoothly. You quickly wave the tall, young, red-headed man into the party. Same with the tall, portly man. In fact, you welcome all the delegates without incident or delay. Around 9:30 am, when the queue to enter the venue is longest, a tall, older woman steps up. She is thin and appears to be wearing a wig. When she presents you with her Russian passport, you note a fish tattoo on the inside of her wrist that says “Rybakov.”
You discreetly alert the head of security. Two burly agents show up and escort the suspect away. Further questioning quickly reveals “her” to be the thief in disguise. You found “the girl with the dragon tattoo”.
False positives—also called “false declines” or “sales insults”—occur when merchants or financial institutions decline legitimate orders. False positives are a result of the inability to properly quantify the level of fraud risk in an online interaction. The impact of false positives can be tough to measure but experts calculate they are actually 13x costlier than the fraud they are attempting to prevent. In fact, Business Insider says eCommerce merchants turned down more than $2 billion in net revenue last year.
If you’re using an in-house or third-party fraud prevention solution that lacks enterprise-class capabilities, you could be throwing away millions in lost revenue. Download the eBook “The Silent Sales Killer: False Positives” to discover strategies for avoiding false positives, while still reducing fraud.