financial meltdown – since january 1, 2008
TRANSCRIPT
Financial meltdown – since January 1, 2008…
US$20B Bailout
US$100B Bailout
BANKRUPT
US$200B Bailout
DOW’s 2008 worst day - $1.2 TRILLION MARKET VALUE GONE – Sept 29, 2008
Not a lot of good news on the job front…
Angel Gurría Secretary-General of the OECD
“Global job losses to hit 25 million in 2009.” December 29, 2008 - Paris
apprx 8 million lost last year
Is this the end of Free Trade?Indonesia - restrictions on > 500 products, demanding special licenses and new fees on imports. (Dec 2008)
Russia – 35% tariffs hike on imported cars. (Dec 10, 2008)
India - levied a new 20 percent dutyon imports of some soybean oils. (Nov. 18, 2008)
World Trade Organization (WTO) chief Pascal Lamy has abandoned attempts to restart the world trade talks (Dec 2008)
Vietnam - raise taxes on imported steel to 12 percent from 8 percent. (Dec 2008)
China - new export tax rebates on more than 3,700 products – covering roughly 28 per cent its export (Nov 2008)
US - $17.4 billion bailout of the auto industry (Dec 19)
Asia Pacific slowing down…
+4.5%(+6.2
%)
HK
+2.1%(+2.6
%)
+3.5%(+5%)
+0.3%(+3.2
%)
-1%(+2.5
%)
+8%(+9.6
%)
+2%(+3.6
%)
+6.3%(+7.5
%)
+2%(+3%)
GDP Growth 2009(GDP Growth 2008)
+0%(-
1.3%)
+5%(+4.3
%)
+3.7%(+4.1
%)
+3.7%(+4.1
%)
+6.5%(+6.7
%)
Is this the end of the China economic miracle?
-6.5 million migrant workers may be jobless in 2009 – Xinhua News Agency-1.5 million college students will not have a job in 2009 - Chinese Academy of Social Science
1. Worldwide economic slowdown-- depressing demand.
2. Protectionism threatens free flow of goods across borders.
3. Increased political uncertainty and social instability in our region.
All this means CYBER CRIME will be on the rise.
These 3 things keep me awake at night …
Today’s Presentation• Brief introduction to an Online ecommerce
platform and how the marketplace works. • Prohibited Items on platforms.• How industry should partner with law
enforcement to fight wrong doing on the internet.
• What the industry should provide and how to interpret.
• Industry - platforms as an investigative tool.• How industry can assist law enforcement. • Introduction to payment gateways.• Policies of Payment Gateways - Acceptable
Use Policy• Policy violations: Detection and enforcement• Contact details of company officers for law
enforcement
Online Marketplace
• Is only a marketplace which brings millions of buyers and sellers together .
• eBay model never has possession of the listed goods. We do not see the Seller, Buyer or the product. However, we have a BUYER PROTECTION POLICY.
• Users are not allowed, among other things, to list illegal, dangerous, infringing items or post false, inaccurate, or offensive listings.
Densely Populated marketplace – maintaining safe is a challenge
eBay Inc. has expanded to include some of the strongest brands in the world - eBay, PayPal, Skype, StubHub, Shopping.com, and others.
Operations in 39 markets with more than 86.3 million active users.
•There were 732 million new listings added to eBay.com worldwide in Q4-08. At any given time, there are approximately 113 million listings worldwide across 50,000 categories with approximately 1 billion page views per day.
•Most expensive item sold -private business jet at US $4.9 million.
How Online Marketplace Works
Item is displayed on marketplace for a set
period of time (typically 7 days)
Buyer will often send paymentby PayPal or Cheque. Upon receipt of payment, goods are sent by the method described
in the listing
During this time, any user can bid on the item over the Internet.
Current high bid and bid history is updated and displayed.
The high bidder
is notified with payment & postage details
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Buyer and sellerleave positive, neutral or negative feedback
based on their experience
Typical Frauds in eCommerce
• Item not received.• Item not as described.• Banned items listed for sale.• Fake items for sale ex. Louis Vuitton,
Gucci, Rolex - Rights Owners protest.• Account take over• Use of stolen Credit cardsFrauds are not committed by regular sellers
since there is a Feedback mechanism which is the brand equity of the seller.
Preliminary steps to prevent fraud and address the resolution
There should be :• Site Policy displayed prominently. • Remedies – Security and Online Dispute Resolution mechanism.• A Buyer Protection programme.• Work in tandem with the Rights owners across the globe -- Notice
and take down, daily monitoring, Sufficient deterrent mechanism on the site.
• Law enforcement page – forum for complaints. Provide information to Law Enforcement Agencies, acceptance of advise.
• Industry should do real-timereal-time screeningscreening of users, items listed, financial transactions thru a robust Fraud Detection Engine
• Should have a team of highly trained Statisticians that help build predictive computer modelspredictive computer models to detect and prevent fraud and identity theft
• 24 / 7 worldwide security team ( eBay has over 1,000 risk specialists 00 risk specialists many with PHD’s many with PHD’s ) patrolling sites to detect and prevent fraud.
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Fraud Prevention & Enforcement Strategy
FIT
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TRUST: “People are basically good”TRUST: “People are basically good”
Protect to Protect eBay users
Tools for Investigators
• Covert Accounts
• Remembered Searches
• Geographical Searches
• Ask Seller a Question
• Feedback
• Statements and affidavits in support of prosecutions
• Media Releases
Referral
Case
Published
START(Trigger)
END(Case Created)
Prioritization
User Registration
Sell
Bid
Event
Real Time Detection
Detection
Intervention
FILTERS
Prohibited & Restricted - Items Policy
Rules Proactively Enforced 24/7
No Pornography, Drugs, Guns, Counterfeits, Wildlife, etc
ZERO TOLERANCE
Security and Resolution Center
Some prohibited items
Examples include:• Drugs & drug paraphernalia• Firearms• Fireworks• Government identification licenses• Hazardous materials• Recalled items• Human parts and remains• Stocks and other securities• Stolen property• TV descramblers
eBay has strict policies on what can and cannot be sold in line with Indian laws and regulations
Questionable items• Alcohol• Artifacts and Heritage Items• Autographed Items• Electronics Equipment• Food• Mature Audience• Offensive Material• Police-Related Items• Pre-Sale Listings• Surveillance Equipment• Tickets• Travel• Used Clothing• Used Medical Devices• Weapons & Knives
Data Sources for Filters
Filter Creation for Marijuana
CSR Input Gov./LE AgenciesMember Reports
Determining Filter Criteria
DEA terms for marijuana filter
Working the results: Human Review
Locating an existing Policy using the URL
http://pages.ebay.com.au/help/policies/items-ov.html
Platform as Investigative Tool-- Community & Law Enforcers -- detect banned items
Geographical searches – ALICE SPRINGS 0870
Geographical Searches
Policy Violation Detection: User Reports
Available Data on eCommerce Platform
Data available upon receipt of a confirmed agency letterhead or email
User ID, email address• Name, address telephone numbers• Banking and credit card information• Member account notes• All items listed with winning bids • All items won• All Bids placed• Related account information• Emails sent by member to eBay and return
Trading History
IP Address
• Every Computer in network have a IP address i.e. 91.55.200.67
• It is similar to your house address
• IP Address can be– Public IP Address
• Static• Dynamic
– Private IP Address
Public IP Address
Private IP Address
Who manages IP address and Domain name
• ICANN: Internet Corporation for Assigned Names and Numbers
– Responsible for
• Internet Address assignment &• Domain name server
management • http://reports.internic.net/cgi/
registrars/problem-report.cgi
DNS (Domain Name Server)- Like phone book for Internet ex. www.nist.gov
IP Address not available- What next?
IF FULL HEADERIF FULL HEADER is not available or Source IP Address is hidden/ spoofed is not available or Source IP Address is hidden/ spoofed
Resolution 1)Resolution 1)- -
Use email tracking i.e. Use email tracking i.e. www.readnotify.com. Can also use it to track CHATuse it to track CHAT. .
Resolution 2)Resolution 2)- -
Contact service provider of the email/ chat, and try to seek Contact service provider of the email/ chat, and try to seek
a) Registration IP Address with date and timea) Registration IP Address with date and time
b) Registration details i.e. Name, Address, Contact number (optional), b) Registration details i.e. Name, Address, Contact number (optional), alternate email id etc., alternate email id etc.,
Email ID Tracking• What is required to track an email id
– Email ID which you want to track– Create One another Email ID that can be used for tracking
• How to track an Email ID– Go to www.readnotify.com ; Create a readnotify id for tracking email ID
Email ID Tracking- (Readnotify)
In the “To” box type the email Id which you want to track followed by .readnotify.com
Click on “Email quick Send”
Email ID Tracking- (Readnotify)
Email ID Tracking- (Readnotify)
It shows the Date & Time of mail opened by recipient
It shows the IP Address from where mail has been Opened
Locate ISP & Computer system- example
Contact the service provider for further details.
Provide following details to the ISP– IP Address– Date & Time along with Time
Zone ex. 8 May 2008 06:52:22 -0600
Website to convert time zone :
http://www.timezoneconverter.com/cgi-bin/tzc.tzc
World’s payment gateway
• Payment gateway ??? • Payment gateways Acceptable Use Policy.• Policy violations: Detection and
enforcement.• How payment gateways should partner to
protect our platforms and users.• Data to be provided to LE agencies ex. IP
address, predictive location of fraudster.
Densely Populated payment gateway – maintaining safe is a challenge
• 70 million active accounts* (175 million total accounts).
• Available in 190 markets, 19 currencies, 17 languages.
• Total Payment Volume in 2008 is US $ 60 billion.
• About $2,000 sent every second.
* based on Forrester estimates of US e-commerce at $265 billion
How a Payment Gateway Works
Buyer Seller
Withdrawal Method
Bank Account
Debit card?
CheckAgency
Account
Stored Value
Balance
Credit/Debit Card
Bank Acct
Funding Source
Funds Flow in a Payment Gateway
• Funds flow from PayPal account to the receivers bank account.
• PayPal has a US $ bank account with Deutsche Bank in Singapore
• PayPal sends payment instructions to DB Singapore along with US$
• DB converts US$ into INR and disburses payments out of India (out of DB owned bank account, PP does not have a bank account in India)
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How PayPal Works
Merchant has the option to withdraw funds or send payment to another customer.
Customer clicks on PayPal linkon merchant’s auction or website.
If New Customer: Customer signs up on PayPal website and enters card/bank information and payment amount.
If Existing Customer: Customer logs into PayPal website and enterspayment amount.
Merchant gets electronic notificationof funds received. Merchant delivers goods or services.
Sender Receiver
Payment for online purchase of goods or services
Why Buyers Use Payment Gateway
• Account information
never shared with merchants
• Screening for fraudulent merchants
• Covered by PayPal Buyer Protection on eBay
Fast
Buyer
Safe Easy
• Easy to get started
• Choice of payment methods
• No need to pre-fund
• Fast checkout
• Seller can ship sooner
Why Sellers Use Payment Gateway
• Gets his money faster
• Can withdraw immediately
Seller
Fast
• Works on eBay & his own web site
• Makes it easy to sell to International buyers
• Free tools for e-commerce (shopping cart, invoicing)
• Low cost
Easy
• Filters out fraudulent buyers
• Gives visibility into buyer risk
• Seller doesn’t have to handle buyer financial data
Safe
Trust and Safety
Payment Gateway should committed to creating a safe service.
– PayPal/eBay employ over 1000 people worldwide, dedicated to customer service and trust and safety
– Losses on PayPal transactions are approximately 0.55% compared to 1.0% for large online retailers
– System Safeguards• System leveraged on top of existing financial infrastructure (credit card
or bank account required). No anonymous transactions – customers must provide name and address
• Anti-fraud models monitor payments and decline risky transactions or flag unusual activity for manual review
• Low system limits on sending payments ($500 total) and withdrawing funds ($500 per month) until additional information given by user and validated
• Additional manual reviews performed on larger volume clients
Security measures in PayPal SystemPayPal utilizes several levels of security to ensure the protection and safety of
the users of the system worldwide.• Physical security measures• Badge access• Employee screening• Technical security measures• Firewalls• Encryption• Password protection for accounts• Operational security measures• Risk management team (transaction caps based upon risk
associated with user or transaction type)• Fraud protections • Proprietary software to detect fraud and money laundering or
other suspicious transactions• Users have to sign PayPal’s Acceptable Use Policy which
does not permit use of PayPal for purchase of banned items.
Payment Gateways Anti-Money Laundering Obligations
Actions taken to meet our AML obligations include:
• Obtain and verify customer identification information• Appointment of AML Officers to oversee anti-money
laundering activities• Issuance of annual Anti Money Laundering reports• Implementation of AML & CTF Policies and Strategies• Completion of AML training for all staff;• Sanctions list scanning • File Suspicious Activity Reports (“SARs”) on a wide
variety of topics• Monitor customer information against lists of known
terrorists, money launderers and criminals
Reactive Enforcement : Law Enforcement reports
Acceptable Use Policy
eMail id Tel no.Fax No.
General Fraud Investigation Contact details accessible on the platform
Thank You