Ecommerce Fraud Fighter: Accertify’s Mark Michelon on How Brands Can Stop a Growing Threat

Becoming a fraud fighter was not on Mark Michelon’s radar when he interviewed for a finance job at a new company called Orbitz. He got the job and was asked to look at a problem the company was having with chargebacks on its new website. It turned out to be a fraud ring. Soon, Michelon was hooked, and his finance path pivoted to fraud prevention.

Eventually, Michelon took a role at a new company that specialized in fraud prevention – Accertify, where he is now president, and deeply involved in new strategies and technologies to thwart ecommerce fraud. Just like ecommerce, fraud is an ever-growing business.

“There are so many ways to, to automate attacking websites today, that compared to 20 years ago, it's easy to get spin up servers out there in the cloud, and look for vulnerabilities across a variety of merchants,” said Michelon. (7:59) Credit card theft still happens, but Michelon says the real prize now is credentials, which can be a gateway to numerous accounts. Think digital wallets – where one login could unlock multiple assets. Digital data, a boon to ecommerce merchants seeking to understand their shoppers, is also a boon to fraudsters, who can operate from anywhere in relative secrecy. “It's hard to identify, I'm not going into a store and holding a gun to try to steal the cash register, I'm operating in the autonomy of my, my basement here and spinning up computers anywhere.” (9:40)

Another type of fraud that continues to grow is so-called “friendly fraud” – think the customer or fraudster who claims they never received a package that was, in fact, delivered. Michelon says the practice grew during the pandemic when final-mile delivery companies stopped taking signatures. He says it’s extremely difficult to prove the customer is lying, and fraudsters understand that. “And if you talk to many retailers, it's a bigger problem today than credit card fraud, the amount of abuse around that type and that just continues to rise. So, the industry is asking: how do we solve this?” (14:15)

Confronting fraudsters requires a strategy that tackles ecommerce fraud from multiple fronts and is agile enough to keep up with constantly-changing attacks. It also requires speed. “Any solution that does not give you the ability to adapt quickly, is a huge gap,” said Michelon. Time is money – taking time to code a new solution in-house leaves the door open for huge losses as the fraud continues. (20:15)

Working with a third-party fraud professional means having a team that is always on top of the latest fraud schemes and solving for those using data, machine learning and human professionals to interpret and guide the use of that data. (21:00) A good strategy also considers the need not to create so much friction for the shopper, legitimate transactions can’t get through. Michelon says merchants can turn up the dial to prevent most fraud, but in doing so, brands could lose a large percentage of legitimate sales as well and turn away shoppers for good. It’s a fine line Accertify is constantly evaluating to ensure legitimate sales get through.

Listen to the full conversation with Accertify President Mark Michelon, and Digital River CMO Ted Rogers to learn more about the risk of fraud for ecommerce brands and how to prevent it.