Fergie's Tech Blog

Retail Fraud Rates Plummeted the Night McColo Went Offline

Brian Krebs writes on Security Fix:

One month after the shutdown of hosting provider McColo Corp., spam volumes are nearly back to the levels seen prior to the company's take down by its upstream Internet providers. But according to one noted fraud expert, spam wasn't the only thing that may have been routed through the Silicon Valley based host: New evidence found that retail fraud dropped significantly on the same day.

It is unsure whether the decrease in retail fraud is related to the McColo situation, but after speaking with Ori Eisen, founder of 41st Parameter, he said close to a quarter of a million dollars worth of fraudulent charges that his customers battle every day came to a halt.

Eisen, whose company provides anti-fraud consulting to a number of big retailers and banks, told me at least two of the largest retailers his company serves reported massive declines in fraud rates directly following McColo's termination.

"It stopped completely that night," Eisen said, referring to a drop in fraudulent activity linked to purchases of high-value merchandise with stolen credit and debit cards on Nov. 11, the day McColo was shut down. "Yet, it will come back after [the scammers] erect their new infrastructure."

posted by Fergie @ 12/11/2008 05:58:00 PM