Managing fraud and reducing risk


As digital transactions become increasingly prevalent, the importance of robust security measures in e-commerce cannot be overstated. TOOLBX is dedicated to staying at the forefront of transaction security and fraud prevention to reduce fraud risk to dealers using our platform, however it should be noted that while risk can be minimized, it can’t be reduced to zero.

The purpose of this article is to educate customers on our risk management strategy and to provide information on risk that our customers are exposed to.

Risk management strategy

Our approach to mitigating and identifying fraudulent transactions is a three-tiered strategy that strives to strike a delicate balance between enhancing customer experience, maximizing dealer sales, and minimizing risks. The components of this strategy include:

  1. 3D Secure (3DS) for authenticating transactions

  2. Risk scoring system for evaluating transactions

  3. Manual case review for handling high-risk transactions

3D Secure (3DS)

3DS is a pivotal security protocol that adds an additional layer of authentication to online transactions by shifting the liability to the card issuer in the result of a fraudulent transaction. It plays a significant role in reducing unauthorized card use and combating online fraud. However, in instances of customer dissatisfaction, liability will not shift. TOOLBX's dynamic implementation of 3DS aims to find the right balance between customer experience and fraud minimization. TOOLBX applies 3DS in the following scenarios:

  1. 3DS is applied to the first three customer transactions

  2. 3DS is always used for orders over $500

  3. Where 3DS is not applied, a +55 is added to our risk scoring system, with scores above 65 undergoing manual review

Risk scoring system

Each payment on the TOOLBX platform undergoes risk evaluation. Transactions are either accepted, blocked, or sent for manual review based on their risk score. Scores of 100 or more are automatically rejected, while those above 65 are manually reviewed.

Manual case review

Transactions that reach a certain risk score or trigger specific risk rules undergo manual review before payment capture. This involves scrutinizing payment details, shopper DNA, and risk results. Decisions to accept or reject transactions may involve consultation with the dealer.

This article provides a general overview of our risk management strategy. You can read the detailed articles provided below to learn more about each component.