ThreatMetrix Automates Fraud Detection, Improving Operational Efficiency and Reducing Customer Friction


Nu Skin is a direct selling company that distributes more than 200 premium-quality, anti-aging products in the personal care and nutritional supplements categories. Nu Skin sells its innovative products to more than one million customers worldwide through its global network of sales leaders in Asia, the Americas, Europe, Africa and the Pacific. It generated over $2 billion in revenue last year.

Nu Skin has scientific expertise in both skin care and nutrition, built from over 30 years of experience, and continually develops innovative brands including the Nu Skin® personal brand, Pharmanex® nutrition brand, and ageLOC® anti-aging brand, which have attracted a loyal following. Nu Skin offers an Automatic Delivery Rewards (ADR) program in which customers can receive products delivered automatically each month at a discounted price.

The majority of our business is generated through the online channel, which means we rely heavily on data to differentiate good customers from bad. The wide variety of data available from ThreatMetrix has greatly improved our decisioning process.

Lisa Hogan, Fraud Prevention Supervisor, Nu Skin

Business Problem

The rapid growth and development of global eCommerce has bred a generation of digital consumers who demand streamlined access to products and services, low online friction, fast turnaround times and personalized experiences. However, eCommerce merchants operate in a climate of heightened risk, as fraudsters target customer accounts for the rich bounty of personal credentials and card-on-file information they contain.

As large-scale data breaches continue to make headlines, the use of stolen identity credentials to perpetrate online fraud has become ubiquitous. With 98% of their business conducted online, Nu Skin relies heavily on data to determine the legitimacy of a transacting user.

Nu Skin was experiencing a surge in chargebacks, which reached an all-time high of over $323,000 in one month. The company uncovered the following fraud typologies:

  • Existing customers were signing up to the company’s automatic delivery rewards (ADR) program, receiving product shipments for months before calling to tell their banks that they did not authorize the recurring charges.
  • Dishonest distributors were signing up unwitting customers to the ADR program in order to capitalize on improved commissions and bonuses.
  • A more sophisticated scheme involved fraudsters setting up third-party websites that attracted legitimate buyers. Fraudsters would create accounts on Nu Skin for legitimate buyers and place orders for them using stolen credit card credentials, then pocket the money from the legitimate buyer.

Nu Skin was operating a completely manual review process to try and stem this influx of fraud, but as a result was missing the chargeback time limit. This resulted in the forced acceptance of a high proportion of chargebacks. Good customers were getting caught in the net; seeing a delay in product shipment of up to 3 days.

Nu Skin needed a holistic fraud and authentication solution that could bring more automation to its decisioning process, providing digital identity intelligence to make more informed, and near real-time, risk decisions.

ThreatMetrix has been invaluable to our company. We have been able to greatly reduce the time spent manually reviewing orders and do business more confidently as we see fewer chargebacks and less fraudulent activity. With the real-time information provided by ThreatMetrix, we have been able to do this without negatively affecting our customers’ experience.

Lisa Hogan, Fraud Prevention Supervisor, Nu Skin

Leveraging ThreatMetrix Intelligence to Detect Evolving Fraud Schemes

The ThreatMetrix Digital Identity Network® harnesses global shared intelligence from millions
of daily consumer interactions to create a unique digital identity for each user by analyzing the myriad connections between devices, locations and anonymized personal information. Behavior that deviates from this trusted digital identity’s normal behavior pattern can be accurately identified in real time, alerting Nu Skin to potential fraud. Suspicious behavior can be detected and flagged for review or rejection before a transaction is processed, creating a frictionless experience for trusted users and allowing Nu Skin to focus more on growing its business by attracting and retaining loyal customers.

Using ThreatMetrix, Nu Skin is able to leverage real-time intelligence around a transacting user’s true digital identity, customize the solution to adapt to the unique needs of the company, and recognize patterns among customers or distributors that may be indicative of fraud. ThreatMetrix ID™ further helps Nu Skin understand potentially high-risk scenarios by creating a unique digital identifier for every transacting user, and visualizing the relationships between all the entities linked to that user, such as device information, tokenized email address and other account markers.

Long-Term Success

  • ThreatMetrix SmartID® identifies returning users that wipe cookies, use private browsing and change other parameters to bypass device fingerprinting. This improves returning user detection and reduces false positives.
  • ThreatMetrix deep connection analysis technologies give Nu Skin a clearer view of suspicious events. Fraudsters often attempt to hide behind location and identity cloaking services such as hidden proxies, VPNs and the TOR browser. ThreatMetrix accurately detects the use of these technologies and, in the case of proxies and VPNs, allows Nu Skin to see the true IP address, geolocation and other attributes of each event.
  • ThreatMetrix ID bridges online and offline data elements for each transacting user and goes beyond device-based analysis, grouping various other entities based on complex associations formed between events, consistently identifying a person irrespective of changes in devices, locations or behavior.

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