Is Sharing, Really Caring?
The onus to catch fraudsters and prevent them from poisoning the ecosystem is on shared economy platforms.
Technology is playing a pivotal role in satiating our quest for faster and cheaper goods and services, and using idle assets to make money through shared economy platforms. However, the same technology that acts as a facilitator can also become a vector for fraud.
The shared economy is your barter system of the bygone era, albeit technology-driven. From physical goods, properties, skills, and resources; the sharing economy has made it possible to find goods and services rather quickly. What started off as a means of letting people use their un- or under-used assets to earn extra income, has metamorphosed into a booming global business that has grown beyond financial returns as the primary incentive. Juniper Research has reported that the shared economy was worth $18.6 billion in 2017 and is poised to touch the $40.2 billion mark by 2022.1
Following the Money Trail
Fraudsters have found that the shared economy can be a lucrative target to make money. The core sectors of the shared economy are experiencing various forms of fraud that can lead to the erosion of trust among transacting parties, thus negatively impacting the success of the platform.
Property Rentals: A favorite target for fraudsters is travellers looking to book properties through property-booking platforms. Fraudsters use stolen customer details and attractive property pictures to create fake listings on these platforms. Using social engineering, fraudsters try to move the discussion out of the platform’s messaging system and convince the traveller to make payments using money orders or wire transfer services. And, for all you know, there may be multiple such discussions and multiple money transfers happening simultaneously. Fraudsters disappear once they receive the money, leaving travellers robbed of the money and no place to stay when they arrive.
Ride-hailing Services: Fraudsters create multiple fake accounts on ride-hailing platforms using stolen credentials and fake identity proofs in order to pocket first-time driver bonuses over and over again or get fees on fake cancellations. They even book fake rides and use stolen credit card details to funnel money to their fake driver accounts. Fraudsters also use sophisticated techniques, such as account takeover, to rob millions of dollars from ride-hailing drivers. They pose as representatives from the ride-hailing service and use social engineering to get the driver to share information such as email ID, account password, and the one-time-password code in order to clear two-factor authentication in order to wipe all earnings from the driver’s account.
Crowdfunding Websites: Fraudsters create fake business ventures on crowdfunding websites to cheat investors. They copy fundraising campaigns from other similar websites and change filler words to appear unique. Furthermore, they also create fraudulent customer accounts with forged documents for verification on these websites, so they can launder the money procured through illegal ways.
Who Do We Trust?
In the traditional barter system, goods and services were exchanged with people who had a certain level of trust among them. Not so in the present-day shared economy platforms. The customer doesn’t know the provider and vice-versa. One of the ways platforms tried building trust was through the review and rating system. However, reviews and ratings soon became a mechanism to fraudulently increase a certain provider’s credibility or to tarnish someone’s image through fake, negative reviews.
Shared economy platforms do verify their users through identity proofs such as driver licenses or passports before onboarding. But, for tech-savvy fraudsters it’s ridiculously easy to forge these documents and clear security checks.
That brings us to the moot question: how can users ensure they are dealing with genuine people? The onus to build this sense of safety among users is on shared economy platforms. They must deploy advanced technology-driven solutions in order to catch fraud early in its track and prevent the poisoning of the entire ecosystem.
For a Secure, Thriving Ecosystem
Simility, a PayPal service, is empowering shared economy platforms to build and maintain trust among the users—both customers and providers—with its advanced analytical solution, the Adaptive Decisioning Platform. Using device, geolocation, email address, credit card and other cross referenced data, Simility’s end-to-end fraud prevention solution helps the sharing economy platform ascertain the true identity of users. In addition, the platform uses big data analytics with augmented machine learning capabilities to analyze and unearth subtle, seemingly-unrelated patterns to nail fraudsters. This, apart from detecting fraud in its nascent stage, allows a frictionless experience for genuine users and builds transparency in transactions. Shared economy platforms can sieve out fraudsters and grow their businesses by building trust among users.
To learn how you can ride the shared economy wave with a trustworthy platform, schedule a demo now.
1. Sharing Economy Revenues to Double By 2022, Reaching over $40 Billion: https://www.juniperresearch.com/press/press-releases/sharing-economy-revenues-to-double-by-2022
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