SOURCE: The 41st Parameter

August 22, 2006 08:00 ET

The 41st Parameter Identifies Latest E-Commerce Fraud Scheme to Help Internet Retailers Prepare for Fall Shopping Season

Latest Wave of Attacks Demonstrate Well-Coordinated Efforts to Bypass Fraud Detection Systems

SCOTTSDALE, AZ -- (MARKET WIRE) -- August 22, 2006 -- The 41st Parameter, a leader in agent-less, covert fraud detection and prevention for the online channel, today announced it has identified the latest e-commerce fraud scheme that merchants need to be aware of as they prepare for online spending boosts associated with the Fall shopping season. Based on data generated from its e-commerce customers, The 41st Parameter found increased instances of fraudsters coordinating their attacks by using personal, digital and financial data that all appear legitimate to typical detection systems. In this latest trend, perpetrators have improved their ability to match the key parameters that most merchants monitor to detect suspicious behavior including: IP address, billing and shipping address, credit card number and other account and transaction data. When these identifiers all seem to match a legitimate customer and come from the same geographic location, the fraudulent transactions appear genuine to most fraud detection systems.

"Online merchants need to continually evolve their security methods to protect themselves and consumers from increasingly coordinated attacks," said Ori Eisen, CEO and founder, The 41st Parameter. "Using sophisticated PC 'fingerprinting' technology to compare order information with device data and other parameters such as time setting, time zone and language setting, makes identifying fraudulent transactions much more accurate, and helps identify suspect orders that may be undetected by traditional systems."

The 41st Parameter also finds that international fraudsters are using U.S.-based IP addresses, with U.S.-issued credit cards and shipping and billing information that also matches domestic records. As a result, online merchants are increasingly missing fraudulent orders, causing escalating chargeback rates (the process by which merchants reimburse legitimate customers for fraudulent purchases made in their name) while eroding consumer confidence in online shopping. For most online merchants, chargebacks are one of the key metrics used to measure the success or failure of online security systems.

Using its proprietary FraudNet™ solution and patent-pending TimeDiff Linking™ technology, The 41st Parameter successfully reduced a major e-commerce customer's chargebacks in the first year of implementation by more than 60 percent. The system invisibly collects a device "fingerprint" of any online machine based on more than 40 parameters to identify unique attributes from the PC. This device-level recognition capability helps determine if the account access or transaction source is a legitimate, known customer, or an unrecognized source that can be monitored or investigated prior to shipping merchandise.

About The 41st Parameter

As the pioneer of covert, online fraud detection and prevention technologies, The 41st Parameter offers highly accurate, non-intrusive fraud control measures for the online channel. By continuously collecting new and unique parameters from end-user computers during online account access, the Company's patent-pending technologies enable forensic identification of devices to monitor suspicious or fraudulent account activity and help protect sensitive customer data. The 41st Parameter's products have "zero imposition," requiring no action or behavior change on the part of the consumer. For more information, please visit www.the41.com.

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