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Subscription billing fraud solutions for CNP payments
E-commerce and digital businesses that practice subscription billing or recurring billing need a fraud solution that combats new account fraud, account takeover attacks, and friendly fraud.
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What is subscription billing fraud?
Subscription billing fraud happens when bad actors or even good customers commit intentional or accidental fraud against a business that offers subscription billing. Any business or industry that practices subscription or recurring billing is susceptible to this fraud. But subscription billing fraud is especially prevalent among streaming platforms, gaming companies, edtech providers, and online retailers.
Fraudsters and customers may use false credentials to obtain multiple free trials, new-user perks, and referral discounts. In some cases, fraudsters launch account takeover attacks to sell user profiles out from under subscribers. Plus, companies that practice subscription billing but aren’t upfront about payment terms increase their friendly fraud and customer dispute risks.
Benefits of subscription billing fraud solutions
Protect free trials, sign-up bonuses, and referral discounts.
Stop account takeover attacks
Intercept friendly fraud disputes
Verify each user’s digital identity and prevent fraudulent CNP payments.
Drive subscriber growth and increase revenue opportunities.
How a subscription billing fraud solution for CNP transactions works
Subscription billing fraud solutions take a multi-layered approach to protecting subscribers and preventing malicious activity. Kount’s Identify digital fraud solutions verify a user’s digital identity. It can detect when someone attempts to open multiple new accounts to take advantage of free trials and sign-up bonuses. Then its account takeover protection capabilities detect malicious or high-velocity login activity.
Meanwhile, Kount’s Assess risk mitigation solutions can determine a user’s fraud and chargeback risks before you authorize a transaction. Additionally, post-authorization tools can help you intercept customer disputes around subscription billing before they become chargebacks. Kount’s solutions combine advanced AI, two types of machine learning, global network data, and customizable business policies to catch fraud and increase revenue opportunities across the customer journey.
Top fraud risks associated with subscription billing models
According to data from the last year, 78% of adults globally use a subscription service. Subscriptions present excellent ways for e-commerce merchants to create unique shopping experiences and build brand loyalty. But it’s not without its challenges. As long as merchants understand and address the potential fraud risks, subscriptions help you expand revenue streams and foster long-lasting customer relationships.
How Fetch Rewards grows subscribers 500%, reduces manual reviews 90%
Fetch Rewards delivers the fun of coupon discounts without the frustration, rewarding daily purchases logged via simple receipt scanning. Upon its release, customers flocked to the app, eager to cash in on hassle-free rewards. But with rapid adoption came a spike in new account and referral fraud. So the company implemented Kount for its email analysis, transaction velocity policies, and safety scoring capabilities.
Gifted subscriptions at high risk of friendly fraud disputes
44.95% of respondents in a recent Kount survey say they’re likely to purchase a retail or streaming subscription as a gift during the holiday season. While this gift idea is great for business, it also increases friendly fraud risks. Consumers may forget they signed up for services and initiate disputes once they get the bill for re-upping the service. Understanding more about these and other risks can help you increase customer confidence and retain holiday revenue.
Protect subscribers and prevent malicious activity from hurting subscription billing revenue