One of the single most crushing problems facing ecommerce entrepreneurs today is fraudulent transactions. Out of control fraud in the shopping cart will inevitably lead to the termination of a business’s merchant account, in addition to untold financial loss including: costly chargebacks, fraud investigation costs, court fees, and the cost of lost (stolen) goods shipped out to fraudsters.

The toughest hurdle to overcome when trying to eliminate shopping cart fraud is that it’s very hard for a business owner to distinguish criminals from legitimate customers without help from fraud experts. Misidentifying a legitimate customer as a fraud is a sure way to not only lose their long term business, but also a surefire way to destroy your online reputation.

In my own quest to eliminate fraud on my own and my customer’s websites, I was recently introduced to a new and exciting fraud prevention app called FraudLabs Pro.

This fraud identification app promises to do these two things very well: Reduce chargeback and eliminate identity fraud – both are achieved by using crowd-sourced fraud data collected from other FraudLabs customers, ecommerce networks, payment gateways, and other fraud protection service partners. This fraud-scanning app integrates with most ecommerce content management systems and quickly scans all incoming transactions to warn site owners about risky transactions before they become a problem.

Unique FraudLabs Pro fraud distribution score and custom validation rules

FraudLabs Pro offers built in fraud filtering via their fraud distribution score analysis. This tool is based on aggregated crowd-source data from their vast and ever-expanding merchant and fraud investigator network. Real time blacklist data such as questionable IP and email addresses, along with known fraudulent credit card and device identification, helps everyone in the network identify potential risky transactions and known fraudsters.

The advantage is obvious, as you can nip fraud in the bud before it happens, letting criminals know you’re on to the scheme, preventing the shipment of expensive goods that you’ll never see again, all while further validating fraud threats for everyone else using FraudLabs’ and their partners platforms. It’s literally the gift that keeps on giving!

Add to this the ability to further filter fraud risks by adding in your own custom validation rules such as username, email, shipping address and more to easily reject orders from fraud risks. Best, you don’t need to be signed in to your CMS to see fraud taking place; email notifications are sent to your favorite device whenever a questionable transaction takes place. As the fraud data-set continues to grow, so to will the list of validation rules.

Here are the most common validation rules FraudLabs users plug into the app to protect their business:

• IP address validation using IP2Location
• Anonymous proxy validation using IP2Proxy
• Billing & shipping address validation
• Ship/Freight forwarder address
• User account validation
• Email address validation: Eg., email age, scanning for disposable and free email services, etc.
• Require sending the user an SMS
• Credit card
• Transaction
• Device Mac address
• Blacklist data

Best, the intuitive platform is always logging data and learning from it via their machine learning algorithms. This might sound like the type of service that only bigger online sellers need to use, but fraud occurs everywhere. Even the smallest online store can be targeted for fraud, as criminals will often see the “TedsPetStore.coms” of the world as an easier victim than Amazon, for example.

Free zero-risk option for smaller online businesses

The Micro Plan is a great way to start protecting your small online business right away. If you do less than 500 transactions per month, FraudLabs can help protect you from chargebacks and merchant account termination at zero cost to you while your fledgling business grows.

A license key is needed to use the API, but also provided for free when you sign up for the Micro Plan. When the need to upgrade to a higher-usage paid plan comes, you can carry your API key, settings, and other FraudLabs data with you. They don’t even require your credit card information on the Micro Plan!

If you’re a big business seeking to decide if FraudLabs Pro is right for you, the Micro Plan is obviously a great risk-free option to perform your assessment with. The next level up is the Mini Plan at just $29.99 monthly, which protects you for up to 1,500 transactions. Costs and search limits go up from there, but the pricing is very reasonable for the piece of mind you’ll get in return.

What I like here is the ability to start small, reducing overall payment fraud risk, while still keeping operating costs low as your online business launches and begins to grow. Most services will allow you to try their product for free, but how many will give you access to a massive network of ecommerce data — data that can protect you from malicious fraud 24/7, for no added costs, until your business starts to make real profits?

FraudLabs Pro works on all the most popular platforms

FraudLabs Pro has taken care of everything, including the development of one-click plugins to make the software work on the most popular ecommerce platforms:

• WHMCS
• OpenCart
• Shopify
• Magento
• PrestaShop
• WooCommerce
• BigCommerce
• AbanteCart
• CS-Cart
• CubeCart
• LiteCart
• MiwoShop
• osCommerce
• WP E-Commerce
• VirtueMart
• ZenCart
• PinnacleCart
• Arastta

Can FraudLabs Pro really end online fraud committed on your websites?

It’s never been more possible to curb fraud than it is in the current technology climate we live in. Will this fraud detection/prevention app curb online payment fraud permanently, once and for all removing the risks associated with accepting card payments on your websites? Mostly, but not totally until banks and lenders find a foolproof method for preventing unauthorized users from using credit and debit cards online.

However, with FraudLabs Pro, ecommerce store owners can for the first time, be empowered with the backing of an endless crowdsourced network of other online store owners and fraud prevention professionals, all committed to a single-minded goal: Preventing fraud, which costs businesses billions in money lost to chargebacks and merchant account termination (this being the most costly of all).

Online merchants shouldn’t have to foot the bill for criminals sitting in the comfort of their own home committing identity fraud and theft, without a care in the world for who they’re hurting financially. Right?

Using software solutions like FraudLabs Pro to scan, monitor, and share fraud data means not just that ecommerce owners can cut fraud down to manageable levels now, but as more people use the software, the potential for identity and payment fraud will continue to drop as more data is collected and stored.