Michael Reitblat is the CEO and co-founder of Forter, the leading eCommerce fraud prevention platform. Prior to founding Forter, Reitblat headed product and business development at several successful Israeli startups, including Pango, Kontera (which was acquired by Singtel), Fraud Sciences (which was acquired by PayPal), and Imperva.
If that wasn’t enough, Reitblat also served a stint as an intelligence officer in the Israeli Cyber Command. And on top of that, Reitblat is a board member and investor in several cutting-edge technology companies focused on artificial intelligence (AI), robotics, and exascale computing.
We spoke with Reitblat to find out how eCommerce sites can triage fraud risks effectively, how to keep scam artists from gaming your loyalty program, and why summiting Mt. Kilimanjaro beats jumping out of an airplane.
TurnTo Networks: Fraud is a huge problem for online retailers (and even that feels like an understatement). How should eCommerce companies be triaging the fraud risks they currently face?
Michael Reitblat: First, we encourage merchants to assess how fraud impacts their customers’ entire shopping journey and experience. Oftentimes fraud attacks by way of account takeover (ATO), or by referral, coupon, and returns abuse, aren’t included as a part of the holistic cost of eCommerce fraud. As merchants invest in optimizing the customer journey, preventing bad actors shouldn’t jeopardize the experience for everyone.
Merchants must streamline the shopping experience for their legitimate customers and swiftly and accurately block fraudulent actors. Understanding the delicate dynamic in play between customer experience and the mitigation of fraud is crucial when evaluating a site’s fraud risks.
TurnTo: Digital loyalty programs are increasingly being gamed by fraudsters. How, exactly, does this happen? And what should eCommerce sites do to mitigate these new risks?
Reitblat: Loyalty fraud is absolutely on the rise. In our most recent Fraud Attack Index, Forter reported that between Q2 2018 and Q2 2019, this method of attack increased by 89%. Instances of loyalty fraud highlight how fraudsters are capitalizing on the shift in the means by which merchants aim to retain customers and differentiate their brand amid an increasingly competitive market.
Loyalty point programs continue to be under-protected areas on most merchant platforms, allowing fraudsters to exploit this avenue. The points accrued in a customer’s account can essentially be treated like digital goods—redemption is wholly conducted online and requires no stolen credit card information to execute.
Fraudsters are able to use these points as “free” funding sources while mimicking legitimate customers.
In order to mitigate the financial costs of this form of fraud and simultaneously protect their brand against diminished customer trust, merchants need a dynamic solution that detects and blocks fraudsters throughout the customer journey. The core of such a solution is founded in an identity-based, fully integrated fraud prevention platform.
TurnTo: Amazon’s headlong charge into one-day shipping has put the pressure on other online retailers to match the strategy. But does such fast fulfillment open eCommerce sites up to more fraud?
Reitblat: As decreased fulfillment times and “buy online, pick up in-store” [BOPIS] options become the norm in customer offerings, ill-equipped merchants potentially open themselves up to increased fraud rates. As brands offer more streamlined services and benefits to their loyal customers, fraudsters are finding loopholes within these improved offerings.
One commonly leveraged loophole in the shipping experience is the ability to mislead automated checks like the Address Verification System (AVS). By changing only a part of the address, fraudsters get by with address manipulation that is too insignificant to be stopped by most systems. Through minor changes and circumvention of these types of processes, fraudsters are able to reroute items from their intended locations to drop spots that best suit them.
Merchants should also be vigilant towards “hold at location” fraud, which is growing in popularity, where fraudsters request the shipment to be held at the shipping company’s facility and then use fake IDs or mules to retrieve the packages.
As fraudster sophistication increases, merchants who rely on manual review teams and rules-based fraud prevention systems will simply not be able to keep pace with these evolving tactics. Forter reported a 23% increase in BOPIS fraud rates over the last year, and with omnichannel offerings only set to expand in the coming year, this form of fraud shows no signs of abating.
TurnTo: Your Twitter bio states that you’ve both climbed Mt. Kilimanjaro and jumped out of a plane—hopefully while wearing a parachute. Between summiting the highest mountain in Africa and skydiving, which was the bigger rush?
Reitblat: From my time in the army, I’ve actually jumped out of quite a few airplanes. That said, the two experiences are difficult to compare, one lasting 60 seconds and the other six days. I’d say the longer the trek, the bigger the rush so that’d be Mt. Kilimanjaro. I actually have my eye on Denali as the next adventure.
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