Let’s face it: security and fraud are serious issues for the social gaming industry. Several experts — such as our friend Marcus Eikenberry over at TrustWho — say that fraud for online games can reach as high as 50%, especially if player-to-player transfers are allowed. Even where there are no P2P transfers, fraud tends to hover around 10%, much higher than Internet averages.
Fraud leads to lost revenue for game developers and site publishers, but worse than that — by creating inflated prices, unfair player advantages and imbalanced economies, it also leads to a diminished user experience for legitimate users.
Ours being a successful and yet still fairly nascent industry, we have yet another reason for concern — scammers and hackers are known to become emboldened by their early successes, and will continue to attack until they are stopped.
So, what can we do to combat fraud?
For starters, each company must do all it can to prevent fraud wherever and whenever possible. At Offerpal, we’re doing our part, through our OfferpalSECURE security and fraud prevention product, which we officially released today with several new features. For instance, we’ve recently built new proprietary rules and triggers into our fraud detection package, including real-time velocity controls to detect irregular patterns in user behavior and machine fingerprinting to prevent scammers from using multiple accounts in order to game the system.
Secondly, we must come together as an industry to define a set of standards we can all agree to.
With that goal in mind, we’ve taken a stab at coming up with a few standards that we’d suggest for the industry. Call them guiding principles, best practices, what have you — these are the strategies that have driven our own fraud prevention efforts, and we think they’ll work for you too.
1. Use the strictest security measures possible
Wherever a user’s personal data is captured or collected, any and all companies touching the data must use the tightest security measures available. For instance, at Offerpal we use multiple security tools, such as IP whitelisting, HTTPS support, security hash signatures, 128-bit encryption, and more. Tight security controls like these serve as the front lines of successful fraud prevention.
2. Hold ourselves (and everyone else) accountable
Fraud is going to happen. There’s no pretending it’s not a problem or that you don’t have a responsibility to prevent it. When fraud does happen, somebody is going to have to pay for it, whether the processing companies, the intermediaries, or the publishers themselves –- likely all three. Knowing this, we must be aggressive in preventing fraud before it starts and taking accountability for it when it does happen.
3. Be vigilant in monitoring for fraud
The best way to fight fraud is to identify it right away and stop it in its tracks. As alluded to earlier, scammers will often test the waters with a small fraud, and if it works or they aren’t caught, they’ll keep doing the same thing until they’re stopped. Our new velocity controls and machine fingerprinting tools, for instance, were designed to fight fraud before it can escalate. We also have a team of expert fraud analysts to look for fraud and put a hold on suspicious activities until they can be investigated. We’d hope that other companies are taking similar measures.
4. Know the user
Another simple way to fight fraud is to make sure you know who your user is. Always ask for a signup or login. Confirm that they are using a valid email address. Validate other data like their names, phone numbers and physical addresses whenever possible. Use permission marketing principles to collect information about your users that will help you deliver a better experience. The more we know about a specific user, the less likely they are to commit fraud.
5. Collaborate with your partners
Fraud isn’t always easy to identify. Many times suspicious activity requires additional information to confirm or deny it as fraud, and one partner might be reliant on another to provide such data. In these cases, the faster the information is shared, the more fraud can be prevented. Therefore it’s important to establish a channel of communication from partner to partner that operates efficiently and effectively.
This list is by no means complete, but we feel it’s a good start towards outlining a more comprehensive set of best practices. What are your thoughts? How else can we come together to fight fraud in social gaming?
We’ll begin to get more answers next week at Casual Connect in Seattle, where the topic is sure to come up. Several security and fraud prevention vendors like ThreatMetrix, Iovation, Vindicia, Plimus and more will be there, and we’ll be sure to speak with each of them about how we can collectively drive the industry forward. We’ll even be conducting a joint promotion with several of them, so if you’ll be at Casual Connect too, be sure to come visit us at table 2S to learn more.
Fraud may be a serious problem for the industry, but it’s not an insurmountable problem — not if we all work together to show the scammers and hackers that we won’t be taken.
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