Using Social Media to Stop Online Payment Fraud

Users of Facebook, Pinterest, and Twitter share personal details every day. Now credit bureaus and payment companies Equifax, EBay’s PayPal, WePay, and Intuit have begun trials to see whether social posts can help prove identities or detect whether customers are lying about their finances. “We are investing a lot in how can we use unstructured data that is sitting out there in social media that can help us understand a little more about identity,” says Rajib Roy, president of Equifax Identity and Fraud Solutions. Fraud cost U.S. online retailers $3.5 billion last year, according to payment processor CyberSource.

While the companies can access only public information or what people choose to share, a great deal is readily accessible. Many young people allow the public to see certain parts of their Facebook profiles, as well as accounts on Twitter and LinkedIn. Consumers also leave traces of themselves on blog posts, Yelp reviews, and online forums. Public data can include photo tags, locale check-ins, and a person’s network of friends. Facebook and LinkedIn provide software tools that let companies automatically import information from profiles on the social networks—with users’ permission—and consumers are allowing this more often, opting for the ease of signing into a website through Facebook, for instance, instead of filling out a separate form.