February 20, 2018
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Posted February 1, 2017
The ‘Sharing Economy’ will hit new highs in 2017. Unfortunately, so will fraud. The question is, how can you protect your brand from the bad guys?
You wouldn’t think being asked about renting a home for a movie shoot would raise a red flag about online fraud detection.
But for Jerome Jacques of Malibu, it was like something out of a horror flick. How did the producers find his house? On Airbnb, they said.
But as Jacques tells the LA Times, there was just one problem: “I don’t have a house on Airbnb.”
As the new year gets underway, the so-called “Sharing Economy” is attracting a growing number of consumers to peer-to-peer brands like Airbnb, Uber, TaskRabbit, Lyft, and countless more. But brands in the space are quickly discovering they have a true challenge heading into the new year—fraud that can quickly erode what they need most to expand their user bases: trust.
As the Times reports, a recent report by the Federal Trade Commission estimates the total value of Sharing Economy transactions has already topped $100 billion. So it’s little wonder fraudsters are out to make some serious moolah.
Take the megawatt house rentals market, where fraudsters can post properties they don’t own.
According to travel tech news site TNOOZ, their ploy often involves a request to email them directly if they don’t respond quickly via a platform’s built-in messaging system. Once would-be renters send an email, they’re coaxed into saving money by bypassing the platform’s commission and paying via bank transfer, instead. That’s exactly the scheme at play with Jacques’ Malibu house.
Then there’s ride sharing … create a fake account with stolen identity and charge rides to their victims’ credit card? Child’s play. The real money comes in the luxury car-sharing sector, where fraudsters pay the fees using stolen information and then make off with a six-figure car faster than you can say “snow job.” Another ploy: Renting a luxury home and ransacking it. From dog-walking to book swaps, schemes of every sort are growing on peer-to-peer platforms—including EBay, Etsy and others.
Part of the problem: All those EMV chips in consumer credit cards that rolled out in the US over the last year. This has reduced brick-and-mortar fraud while forcing fraudsters to target online merchants and platforms more heavily.
As FastCompany points out, cyber crooks increasingly use stolen credentials to commit credit card fraud. ThreatMetrix estimates 1 in 20 login attempts are from fraudsters trying to log into existing accounts—or use stolen identity and/or credit card data to set up fraudulent accounts.
As the Sharing Economy continues to take off, evidence from our own deep dive cybercrime report for travel and entertainment indicates that the underlying platforms will increasingly attract the attention of bad guys.
If you think all of this is just a security issue, think again. The fact is, lack of fraud detection may be holding Sharing Economy brands back from major gains.
Today, it’s estimated only 8% of people say they’re comfortable doing business with somebody on these and other marketplace platforms without trust and confidence in that person’s identity.
In recent years, Airbnb and other large players have started putting noteworthy protections in place. In 2017, look for sharing economy brands of all stripes to begin adopting four key measures:
Despite the attempted fraud on his Malibu home, Jacques isn’t turned off of the Sharing Economy at all. In fact, he frequently lists his house on HomeAway and has even tried Airbnb.
For these and so many other Sharing Economy brands, 2017 will offer plenty of opportunities to encourage new consumers and providers to trial your offerings.
Earning their trust could keep them coming back—and make for a very prosperous new year ahead.