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ThreatMetrix Helps Thwart Online Fraud While Protecting Privacy Using Cookieless Device ID

Cookieless Device Identification Technology Helps Businesses Automate Fraud Decisioning Process

Fresh off news that it had raised $12.1 Million in a Series C round of funding in October, ThreatMetrix, a provider of fraud prevention solutions, today announced the latest release of its ThreatMetrix Fraud Network. The new release incorporates ThreatMetrix SmartID which helps companies stop online fraud while protecting customer privacy without the use of cookies and cookie equivalents such as local stored objects.

With the new release, ThreatMetrix has enhanced businesses ability to detect returning visitors based on the attributes of the device – be it a smartphone, personal or tablet computer – without using any cookie information and has improved rules to use this information to detect spoofed devices and IP addresses as well as sniff out botnets.

According to Reed Taussig, president and CEO, ThreatMetrix, cookies are yesterday’s solution. Organizations have been losing their taste for cookies in tracking returning customers for a number of reasons including:

ThreatMetrix Fraud Network

• A privacy-conscious public has taken to deleting cookies

• Some popular antivirus software, such as Norton, deletes cookies as part of scheduled maintenance

• Flash cookies (LSOs) can be deleted at the same time as PC cookies are

• Apple’s iPhone, for one, does not support Flash and Motorola’s Droid has strict settings for browser and Flash cookies

• New browser privacy modes make it harder to identify returning visitors

The Fall 2010 release of the ThreatMetrix Fraud Network combines its “ThreatMetrix ExactID” device identification with ThreatMetrix SmartID technology to detect spoofed devices and IP addresses as well as sniff out botnets. While many other fraud detection solutions rely primarily on cookies, cookie equivalents that are easily deleted, or a hash of a browser fingerprint that is brittle and continually changes, the Fall 2010 release of the ThreatMetrix Fraud Network provides a more accurate and fraud resistant approach.

“The problem with today’s browser fingerprinting technologies is that they smudge easily,” said Alisdair Faulkner, chief products officer, ThreatMetrix. “Customers change their browser or IP address regularly and fraudsters routinely change their settings. Additionally, botnet scripts randomize device attributes. The result is missed fraud and worse, false positives and declined revenue. ThreatMetrix SmartID overcomes these problems with real-time intelligent matching and confidence scoring.”

ThreatMetrix SmartID complements ThreatMetrix ExactID device identification that positively authenticates customers across PCs and smartphones with the ability to globally track fraudulent devices without false positives. That’s because unlike traditional hashing where every attribute must match exactly to get the same fingerprint, ThreatMetrix SmartID utilizes real-time intelligent matching and confidence scoring to make allowances for changes between visits.

“This enables us to recognize returning devices in much the same way humans recognize faces,” said Taussig. “For example, a witness can still recognize a bank robber based on a distinguishing scar even if they have changed clothes, dyed their hair, or shaved their hair. That’s why ThreatMetrix SmartID is highly resilient whereas traditional device fingerprinting requiring ‘all or nothing matches’ are thrown off when a single feature changes. ThreatMetrix SmartID provides more effective identification of returning visitors that are trying to hide their identity. ThreatMetrix Smart ID can be used by the ThreatMetrix rules engine to identify and correlate suspicious transactions, or it can be fed into third-party identity verification, authorization and authentication solutions.”

The Fall 2010 release of the ThreatMetrix Fraud Network includes several features tailored for financial institutions and high transaction, low latency environments powered by real-time cloud intelligence and allowing customers to configure a risk scoring system based on recognized fraudulent behavior across the ThreatMetrix Fraud Network.

New detection capabilities include the ability to better identify account hijacks, man-in- the-middle attacks, hidden botnet proxies and malware, VPN usage, and the ability to tune risk and transaction limits based on customer loyalty.

“Fraudsters know how to change their user ID, change their IP address and delete cookies,” said Stacy Martin, director of customer service and fraud prevention, Tapjoy, a ThreatMetrix customer. “With the ThreatMetrix Fraud Network, we’ve been able to stop fraud instances that we may have missed previously. With ThreatMetrix SmartID, we expect to catch even more, in particular in our growing mobile gaming market where cookies are extremely ineffective.”

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