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2015 Pindrop Security™. Confidential.
THE STATE OF RETAIL PHONE FRAUD 2014-2015 David Dewey, Director of Research Pindrop Security July 23, 2015
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
METHODOLOGY
PhoneprintingTM
100m+ Enterprise Calls Topic Modeler
45m+ Consumer Complaints PhoneypotTM
500k+ Unlisted Numbers
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
Fencible Goods Electronics, Phones, Toner
Business Accounts
Schools, Hospitals, Enterprise
RISK FACTORS
Customer Service
Phone Orders, Help Line
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2015 Pindrop Security™. Confidential.
RETAIL PHONE FRAUD ATTACKS
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2015 Pindrop Security™. Confidential.
Attacker orders with stolen card Retailer ships order Consumer disputes
charges Chargeback is
issued
CARD NOT PRESENT FRAUD (CNP)
Lost Merchandise
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2015 Pindrop Security™. Confidential.
CARD NOT PRESENT FRAUD (CNP)
Attacker orders with stolen card Retailer ships order Consumer disputes
charges Chargeback is
issued
Lost Merchandise Lost Shipping And Handling
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2015 Pindrop Security™. Confidential.
CARD NOT PRESENT FRAUD (CNP)
Attacker orders with stolen card Retailer ships order Consumer disputes
charges Chargeback is
issued
Lost Merchandise Lost Shipping And Handling
Lost Reputation
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2015 Pindrop Security™. Confidential.
CARD NOT PRESENT FRAUD (CNP)
Attacker orders with stolen card Retailer ships order Consumer disputes
charges Chargeback is
issued
Lost Merchandise Lost Shipping And Handling
Lost Reputation Lost Chargeback Fees & Penalties
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2015 Pindrop Security™. Confidential.
FRIENDLY FRAUD / CHARGEBACK FRAUD
Consumer places order Retailer ships order Consumer disputes
charges Chargeback is
issued
Lost Merchandise Lost Shipping & Handling
Lost Chargeback Fees & Penalties
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2015 Pindrop Security™. Confidential.
BUSINESS ACCOUNT TAKEOVER
Attacker impersonates
business to place Purchase Order
Retailer ships order Business disputes charge
Chargeback is issued
Lost Merchandise Lost Shipping & Handling
Lost Chargeback Fees & Penalties
Lost Reputation
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2015 Pindrop Security™. Confidential.
Shipment Intercept Reshipping In Store Pickup
ACQUIRING THE SHIPMENT
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2015 Pindrop Security™. Confidential.
DATA BREACHES
• Reconnaissance over the phone is the first step in a data breach
• 4 out of 5 fraud calls are not money transactions
Recon Weapon- ization Delivery Exploit Install C&C Action
Lockheed Martin Cyber Kill Chain
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2015 Pindrop Security™. Confidential.
RETAIL PHONE FRAUD BY THE NUMBERS
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
THE THREAT IS GROWING
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
1 IN 1,000 CALLS IS FRAUD
.02%
.10%
.08%
.06%
.04%
.12%
Retail Avg. Call Center
Fraud Calls
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
FRAUD LOSS
• The actual monetary loss
$0.17
• Average fraud loss per call • Does not include:
• Operational Costs • Processing Costs • Shipping Costs
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
FRAUD ORDERS
• Average value of fraudulent orders per call
• Some fraud is caught before the items are shipped
$0.17
$0.65
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
FRAUD EXPOSURE
$0.17
$0.65
$2.40 • The value of the stolen
account • The amount of in-store credit
offered • Non-monetary attacks
• Social Engineering • Reconnaissance • Privacy Breaches
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
BEST PRACTICES
COLLABORATIVE Share info across
organizations
EVERY CALL Function in adverse conditions, on all or
most calls
ANOMALY DETECTION
Detect fraud on the first call
TRANSPARENT Fast, behind the
scenes MULTIFACTOR Examine multiple aspects of call for
accuracy
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2015 Pindrop Security™. Confidential. 2015 Pindrop Security™. Confidential.
LOSS • Packet loss • Robotization • Dropped frames SPECTRUM • Quantization • Frequency filters • Codec artifacts NOISE • Clarity • Correlation • Signal-to-noise ratio
147 audio features
Phone Type Geo-Location Other Risk Factors
PHONEPRINTING™
Phoneprint™
Call Audio Requires 15 seconds
of call audio
86 Risk Score
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2015 Pindrop Security™. Confidential.
PINDROP SECURITY Phone Fraud Stops Here. For more information contact [email protected]