>This is an interesting concept in fraud detection. I’ve always wondered if there was a way to contribute our suspicious orders to a central database that other merchants can leverage. For a time, we used to have fraudsters use our shopping cart to test the validity of credit cards. We had to implement an IP velocity filter (order more than # of times in an hour and you get declined) to stop this type of fraud.
Below is an image I got off the Ethoca site that explains the process of how a community based fraud risk manager may work:
2Checkout.com – Merchant Account / Credit Card Processing Alternative » 2CO Uniting with Leading Online Retailers to Stamp Out Fraud: “2Checkout joined a global fraud-fighting community, powered by Ethoca – a leader in collaborative fraud management – to extend our fraud management services beyond our current system. Now, we have access to shared fraud data from a pool of online retailers designed to help augment our efforts in spotting and stopping fraudulent online behavior more efficiently, and guaranteeing less chargebacks related to fraud.”