Latest news with #RochelleBlease
Forbes
2 days ago
- Business
- Forbes
Why Fake Reviews Present Real Risks For Payment Providers
Rochelle Blease is the president of G2 Risk Solutions, a global risk management firm. Trust is a critical currency in the digital economy, but the problem of fake reviews is rapidly undermining it. This is because the problem, once isolated to shady sellers, has become a sophisticated, AI-powered enterprise. The cost of losing trust is hard to quantify, but for payment providers, the risks posed by fake review merchants are material. The problem of fake reviews has evolved into enterprise schemes that carry financial consequences to any provider that inadvertently supports a deceptive merchant that's made a business of selling fake reviews. To illustrate the scope of the problem, Amazon removed 250 million fake reviews from its site in one year alone. As enforcement ramps up by regulators and card networks, payment providers must strengthen their efforts to identify and shut out merchants who traffic in fake trust. Not long ago, fake reviews were relatively unsophisticated—often easy to recognize and clearly fabricated. Now, an entire industry has emerged that uses automation and AI to scale operations and mimic natural human language and sentiment. This new breed of fake reviews is harder to spot with the naked eye. Fake review merchants have also wised up to new methods to evade detection tools, especially for payment providers who are still using more basic methods. They use techniques like transaction laundering to disguise the sale of fake reviews by processing transactions through a shell site or company. They operate across various regions of the world, making it harder to isolate the problem. For unscrupulous sellers looking for a quick way to boost their "credibility," fake review services are cheap, plentiful and tempting. This is driving the demand for an illicit service that fake review merchants are happy to meet—and it's increasingly coming at payment providers' expense. In 2024, the FTC announced a final rule, "Trade Regulation Rule on the Use of Consumer Reviews and Testimonials," that, among other things, prohibits selling or purchasing fake consumer reviews, testimonials or indicators (e.g., likes, shares, follows). It also allows the agency to seek civil penalties against violators. While the regulation is aimed at merchants, intermediaries like payment providers are certainly not out of the crosshairs. Card networks are increasingly scrutinizing providers that enable bad actors, whether knowingly or through a lack of proper oversight. Payment providers can face significant card brand penalties if they are found to facilitate deceptive behavior. The FTC rule is a signal: The fake review economy is no longer a "buyer beware" issue for consumers. It's now a compliance and financial issue for payment providers who find themselves ever more in the spotlight. As fake review operations and compliance risks grow more troubling, payment providers must take proactive steps to enhance their merchant vetting and monitoring to align with regulatory expectations. Their risk management strategies can be enhanced through the following steps: 1. Update onboarding procedures. Traditional underwriting processes are often no longer enough to identify sophisticated fake review sellers. When onboarding new merchants, payment providers must institute rigorous vetting using a broad array of data points. This helps payment providers make informed decisions about who to accept in their portfolios, and it helps prevent bad merchants from obtaining payment accounts that facilitate the widespread sale of fake reviews. 2. Leverage AI and analytics. AI, combined with deep troves of merchant data, can uncover hidden suspicious patterns and red flags that aren't readily obvious. AI can synthesize billions of data points almost instantly, providing much deeper insight into a merchant's predicted risk behaviors. 3. Implement ongoing monitoring. Even merchants who cleanly pass onboarding checks can begin selling fake reviews at any time. In fact, it's common for bad merchants to use benign-looking "front sites" to obtain merchant accounts. That's why it's essential to have continuous merchant monitoring in place—actively scanning for key red flags around the clock. 4. Share information. Payment providers can work closely with marketplaces, card brands and regulators to share information and insights that benefit cross-industry fraud detection initiatives. The online commerce ecosystem depends on trust between consumers, sellers and the systems that connect them. Payment providers have an important role to play by ensuring the merchants they support are contributing to a healthy ecosystem. As fake reviews become more sophisticated and enforcement becomes more aggressive, the problem is more than a reputation concern. It's a compliance and risk issue that comes with costly penalties. Those who fortify their defenses now will not only be better positioned to navigate the regulatory landscape, but they will build long-term value for online consumers and themselves. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Forbes
21-03-2025
- Business
- Forbes
Emerging Risks In E-Commerce And Payments: Trends To Watch In 2025
Rochelle Blease is the president of G2 Risk Solutions, a global risk management firm. As e-commerce continues to evolve, so do risks facing the ecosystem. The year ahead promises significant challenges for all stakeholders—some known, some emerging and some we have yet to uncover. The weaponization of generative AI (GenAI), increasingly complex fraud schemes and evolving regulatory frameworks are reshaping the e-commerce and payments risk landscape. These developments have far-reaching implications for banks, payment providers and online marketplaces, demanding proactive and agile approaches to risk management. As we monitor billions of pages of e-commerce websites worldwide, here are some of the top trends they are tracking as the year unfolds. All industries are grappling with the transformative impact of GenAI. One of the critical challenges for e-commerce and payments is the use of GenAI to perpetrate fraud. Cybercriminals are leveraging it to build highly realistic fraudulent websites, making them harder to detect. Additionally, GenAI is being deployed to mass-produce synthetic consumer identities, enabling bad actors to apply for illicit merchant accounts at scale. The losses from AI-powered fraud are estimated to reach upwards of $10 trillion globally in 2025. These developments undermine traditional verification practices and amplify risks across the payment ecosystem. Compounding the GenAI issue is the rise of deepfake services, where our risk analysts have seen a marked proliferation. They fuel fraudulent and offensive content creation that erodes trust in online transactions. As these capabilities expand, e-commerce stakeholders must strengthen merchant verification and monitoring to counteract these emerging threats. Specific product categories, such as nutraceuticals, remain high-risk areas for payments providers. Tainted supplements—often containing undeclared pharmaceuticals or banned substances—not only pose consumer health risks but also expose payment providers to financial and reputational harm. New categories of concern have elicited warnings of consumer harm and are gaining regulatory attention. For example, the FDA has recently issued warnings for supplements tainted with yellow oleander, a toxic substance that can have a significant impact on the heart. Marketplaces and payment providers must enhance due diligence processes to monitor closely and quickly shut down services for violative sites when warranted. The growing industry of fake reviews presents reputational and compliance challenges. Despite regulatory crackdowns in the U.S. and U.K., the sale of fake reviews has become a viable industry, exposing payments providers to fines. Illustrating the scope of the problem, Amazon proactively blocked more than 250 million suspected fake reviews from its site in 2023 alone. As illegal sales proliferate online, financial stakeholders must prevent fraudulent review merchants from entering the payments ecosystem. Another alarming trend is the rise of transaction laundering as a service. Transaction laundering occurs when a bad actor obtains payment processing for an innocuous 'front' website and then uses that site to process payments for illegal goods or services. Criminals have begun outsourcing transaction laundering to third parties, who create intricate networks of shell companies, straw signers and thousands of sophisticated 'front' websites to disguise illegal transactions. Cyber threats, fraud schemes and emerging payment technologies drive continuous updates to card network rules and regulatory mandates. Ongoing updates to compliance requirements aim to enhance consumer protections, strengthen data security and reduce financial crime, but they also come with operational complexities. Organizations must navigate these changes while ensuring seamless customer experiences and maintaining trust. Those who fail to stay ahead of regulatory updates risk potential penalties, reputational damage and increased vulnerability to fraud. Proactively integrating compliance into fraud prevention and risk management strategies rather than reacting to rule changes after the fact is the path of least resistance for financial institutions, payment providers and e-commerce platforms. Leveraging advanced analytics, automation and human intelligence can help the e-commerce industry stay ahead of regulatory shifts while mitigating fraud. As compliance expectations grow, those who invest in scalable, technology-driven solutions will be better positioned to navigate regulatory complexities, reduce risk exposure and foster consumer confidence. Addressing e-commerce and payments landscape challenges requires a strategic mindset that sees risk management as a catalyst for innovation rather than a reactive burden. By adopting holistic approaches that integrate advanced technologies and human expertise, financial and technology leaders can help protect the e-commerce ecosystem while more safely enabling growth. In 2025, success will hinge on proactive adaptation to an ever-evolving risk landscape—one defined by both unprecedented opportunities and heightened threats. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
