A recent report out of Europe found that one-fifth of all online fraud is conducted through the channels of Internet gaming.
Now more than ever, online casino operators across the globe are focused on ways to cut costs and keep fraudsters away from profits and player winnings.
Safewww Inc. has developed a new product aimed at breaking the network scam artists use by crippling their computers and other traceable technology. The product could have an impact on the I-gaming industry considering that, according to Experian, 40 percent of all fraud is repeat fraud.
The Company
Founded in 1999 by Israeli Internet security entrepreneurs, Safewww is an international firm that provides identity protection products and services. Safewww's cornerstone technology is patent-pending, third party user authentication and content encryption technology for business and personal Internet transactions.
Safewww has established strategic alliances and received investment capital in the United States, Israel, Spain, China and Argentina. The company has corporate headquarters in New York and a research and development center in Israel.
The Product
With FraudNet, Safewww created a system that can protect payment providers, processors and Web merchants from revenue loss caused by repeat fraud.
FraudNet provides lock-out protection from criminals' PCs before the fraud can be repeated by logging suspect PCs into a negative online database maintained by any card issuer, Web merchant, payment provider or payment processor.
The technology uses a non-intrusive process that registers and uniquely identifies each PC by assigning a "fingerprint," or hardware signature, to the computer when a customer enrolls for his or her online account.
When illegitimate or fraudulent use is encountered, the suspect PC is flagged in a negative database, blocking future transactions from occurring on the machine. By flagging a system and putting it into the database, repeat fraud can be prevented. The technology also acts as a deterrent to potential fraudsters.
The system doesn't require users to remember any additional passwords, carry a smart card or e-token or purchase a biometric device. The unobtrusiveness of the system is major selling point, as it doesn't interfere with a consumer's online experience and is simple for providers to use, implement and maintain.
ClearPay, one of the leading alternative payment providers in the online gaming industry, uses the Safewww fraud-protection system. Officials with Safewww said ClearPay is already saving on its fraud-related costs since implementing the system. In addition to the savings, the deterrent factor has created a decrease in fraud attempts on the ClearPay system.
ClearPay needed to identify customers online to reduce fraud. Because the user base of ClearPay includes customers with all levels of technical savvy, ClearPay needed a solution that was easy to use and required no additional hardware or software set up.
Another major selling point for FraudNet is that providers can add the database to their system without having to increase staff. ClearPay was able to add FraudNet without increasing its customer service support.
Since adding the FraudNet system, ClearPay has eliminated 10 percent of its user base on grounds that the users had fraudulent accounts.
The Future
Safewww hopes to continue growing its licensees and client base. Company officials said they will continue to target the banking sector, B2B exchanges, digital music and video, auctions, store cards and gaming for future revenue.
A recent report from Meridien Research shows that worldwide online payment fraud will increase from $1.6 billion in 2000 to $15.5 billion in 2005 as the number of online payments continues to increase. If those figures weren't enough to create demand for the FraudNet system, 40 percent of Internet retailers were victims of online fraud committed several times by the same perpetrator, according to a study commissioned by Experian in August 2000.
Kenneth Bob, president and CEO of Safewww Inc., said the company will continue to keep its focus on repeat criminals, since they can account for so much of a company's bottom line.
"The economic and social costs of online fraud need to be countered with strong authentication and fraud-prevention technology that doesn't inconvenience the consumer," he said. "Cyber-criminals often steal multiple online identities or credit card numbers and then use this information to perpetrate fraud from a single computer. FraudNet helps businesses stop these repeat fraudsters, reducing their fraud-related liabilities and bolstering consumer confidence that will lead to higher online enrollment and more online transactions."