The direct sales market goes far beyond product catalogs
Posted: Sun Dec 22, 2024 5:09 am
One of the new segments of this work was what we call “door to door”, more popularly known in the market as “Multilevel Marketing” or “Direct Sales” companies.
Behind the most common type of fraud we hear about, the theft of personal data and credit cards, there are many other points of attention to be studied and observed when we enter new territories, even more so when we talk about a market that was completely offline that is migrating to the digital world, which would also be the case of banks.
That's why we asked our ClearSale segment specialist, Priscilla Merchan, to tell us a little more about how fraud permeates this market and how we can help you solve these puzzles.
What types of fraud exist in the door-to-door segment?
There are two common forms of fraud in this segment. The first, which is more similar to what happens in e-commerce, is when the fraudster steals someone's data, through a download free usa email database for example, and then makes a request to be a consultant on behalf of another person, taking advantage of this registration to make purchases, generating a chargeback or default on that third party. Since default takes even longer to be discovered, the fraudster can use this registration with stolen data to take advantage of the products received until the data owner is notified of non-payment and their registration is blocked.
The other most common form of fraud in this segment is focused on sales representatives meeting their targets, which is what we call “Unfair Sales”. These companies usually set a commission amount (and even the possibility of promotion) for consultants based on the number of new resellers they register. This makes them register the number of people they need with data extracted from a viable source (database obtained through consultant recruitment events or through information theft). The victim discovers after a few months that they have a debt due to this registration, and usually starts a lawsuit against the company. However, by the time they discover this, the person who defrauded them has already received the desired bonus.
How can you tell if a company is being attacked by fraudsters?
It is a good idea to always pay attention to the reports from your Financial and Legal departments, as these areas usually notice the loss of revenue due to Chargebacks or Defaults or through the opening of legal proceedings. However, it is certainly best to have a good anti-fraud solution, as internally fraud is only noticed a long time after the event.
How does ClearSale help this segment to prevent these and any other types of fraudulent actions?
The first step is to bring these companies into the reality of the world of fraud, since most of the people we talk to have no idea how this event occurs in their business or that it exists in many situations. Opting for the expertise of our human and statistical analysis is also essential. The power of our analysis desk to detect details that only human subjectivity can see in the intricacies of fraud is essential when making phone contact to authenticate data. Another point is the database we have, which makes the detection of purchasing behavior quite accurate. Therefore, choosing the Clearsale anti-fraud solution is the most appropriate for the company to increase its sales conversion with quality, drastically reducing the occurrence of fraud.
What tips can we give to companies operating in this market?
Always send all types of information that your anti-fraud partner requests to improve the analysis tool, as this data is crucial for detecting not only isolated frauds, but also possible attack scenarios. This way, it is also possible to conduct studies that demonstrate the concentration of fraud. And finally, always try to understand the entire process of your anti-fraud partner's actions. Try not to fall into the routine of “thinking” that you are doing the right thing and following it day to day, as these actions can mask frauds that could be avoided if the guidelines were being followed correctly.
Want to know more about the subject and various particularities of ClearSale's work? Then keep an eye on our blog and also follow us on the following social networks: YouTube, Facebook and LinkedIn. See you next time!
Behind the most common type of fraud we hear about, the theft of personal data and credit cards, there are many other points of attention to be studied and observed when we enter new territories, even more so when we talk about a market that was completely offline that is migrating to the digital world, which would also be the case of banks.
That's why we asked our ClearSale segment specialist, Priscilla Merchan, to tell us a little more about how fraud permeates this market and how we can help you solve these puzzles.
What types of fraud exist in the door-to-door segment?
There are two common forms of fraud in this segment. The first, which is more similar to what happens in e-commerce, is when the fraudster steals someone's data, through a download free usa email database for example, and then makes a request to be a consultant on behalf of another person, taking advantage of this registration to make purchases, generating a chargeback or default on that third party. Since default takes even longer to be discovered, the fraudster can use this registration with stolen data to take advantage of the products received until the data owner is notified of non-payment and their registration is blocked.
The other most common form of fraud in this segment is focused on sales representatives meeting their targets, which is what we call “Unfair Sales”. These companies usually set a commission amount (and even the possibility of promotion) for consultants based on the number of new resellers they register. This makes them register the number of people they need with data extracted from a viable source (database obtained through consultant recruitment events or through information theft). The victim discovers after a few months that they have a debt due to this registration, and usually starts a lawsuit against the company. However, by the time they discover this, the person who defrauded them has already received the desired bonus.
How can you tell if a company is being attacked by fraudsters?
It is a good idea to always pay attention to the reports from your Financial and Legal departments, as these areas usually notice the loss of revenue due to Chargebacks or Defaults or through the opening of legal proceedings. However, it is certainly best to have a good anti-fraud solution, as internally fraud is only noticed a long time after the event.
How does ClearSale help this segment to prevent these and any other types of fraudulent actions?
The first step is to bring these companies into the reality of the world of fraud, since most of the people we talk to have no idea how this event occurs in their business or that it exists in many situations. Opting for the expertise of our human and statistical analysis is also essential. The power of our analysis desk to detect details that only human subjectivity can see in the intricacies of fraud is essential when making phone contact to authenticate data. Another point is the database we have, which makes the detection of purchasing behavior quite accurate. Therefore, choosing the Clearsale anti-fraud solution is the most appropriate for the company to increase its sales conversion with quality, drastically reducing the occurrence of fraud.
What tips can we give to companies operating in this market?
Always send all types of information that your anti-fraud partner requests to improve the analysis tool, as this data is crucial for detecting not only isolated frauds, but also possible attack scenarios. This way, it is also possible to conduct studies that demonstrate the concentration of fraud. And finally, always try to understand the entire process of your anti-fraud partner's actions. Try not to fall into the routine of “thinking” that you are doing the right thing and following it day to day, as these actions can mask frauds that could be avoided if the guidelines were being followed correctly.
Want to know more about the subject and various particularities of ClearSale's work? Then keep an eye on our blog and also follow us on the following social networks: YouTube, Facebook and LinkedIn. See you next time!