Jennifer: He says fraud management in places like this has changed quite a bit since he started this job. For example, they used to set up filters based on a few simple questions.
David Coast: Was he a client we’d seen before, right? We had some flags that we’d be looking at and someone would manually go look at these requests and kind of have to guess whether or not he thought that request was a good one. We ship it, and if it turns out to be no good, we, the retailer, you know, bear that loss. So it’s as if someone stole those merchandise. It’s the same as shoplifting. You know, and it can have a real impact on your business and you want to be careful. If you are too careful, you shy away from good deeds. I mean, there’s nothing worse than taking a customer with a good valid payment method and telling them, no. Sorry. It doesn’t look quite right, so we won’t ship it.
Jennifer: One place Rainbow faced against this…was dealing with buyers in other countries.
David Coast: So they place an order from one of the islands in the Caribbean. So their billing address is a Caribbean address, they basically ship the goods to Florida or a Texas transshipment address where a bunch of orders are combined to go to the island, right? And then they are transported to those islands. These are good customers but for a traditional scam, being able to see the foreign credit card, the foreign address, but the US delivery address would ring all kinds of alarm bells. So, the development of artificial intelligence now so that we can help us know precisely what is good and what is bad, allows us to raise the level of our customer service … so that we take care of customers at the same time, while reducing the potential loss of business, with those orders that We meet it, ship it and then don’t get paid for it.
Jennifer: Rainbow uses a fraud detection tool from Signifyd…and these days they say they decline less than 1% of their applications.
David Coast: In earlier times when we had to do all this manually… they would go to Google Maps and look up the address to see if the address looked legitimate. You know, now with technology evolving to see who you are, where we’ve seen you order, digital identifiers on your device, and the distance between your billing and shipping address. So many factors. Again, even five or six years ago, this process was manual and could take a day or two, you know, now it’s made in milliseconds.
Will Douglas Heaven: I mean, this happened to me yesterday, actually, you know, I got a text. I had taken my car to the garage, you know, and put on it a larger sum than usual.
Jennifer: This is Will Douglas Heaven, Senior AI Editor at Tech Review.