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Tamás Kádár, SEON Technologies: “the end goal of the majority of cybercriminals will always be to generate profit”

Fraud is on the rise, with cybercriminals lurking to get a hold of users’ private information to use it for financial gain.

From abusing credit cards to medical insurances and social security numbers, fraud remains a prevalent problem, affecting individuals and businesses globally. While it is vital for regular citizens to stay alert about potential fraudulent activities, there are also security products available that help manage and prevent fraud.

Tamás Kádár, Co-Founder and CEO of SEON Technologies, which offers risk management and fraud prevention tools, told us which fraud methods are most prevalent today, and how SEON Technologies helps tackle them.

What has your journey been like since SEON’s launch in 2017?

Before SEON was founded, Bence and Tamás met at university in 2016 and bonded over their common interest in cryptocurrencies. Their very first project together was a crypto exchange for the CEE region, which, unfortunately, fell victim to constant attacks from fraudsters.

It was at this point that they realized the lack of adequate fraud-fighting tools on the market. The solution they came up with was to effectively secure certain digital assets from fraudsters and expand them into a viable business. This is what led us to create SEON Technologies and channel its growth to this day.

Can you tell us more about what you do? What are the major differences between your Intelligence tool and the Sense platform?

To put it simply, at SEON Technologies, we are fraud fighters. As a company, we strive to help online businesses reduce the cost, time, and challenges faced due to fraud. For this to happen, we originally developed two tools.

However, we are planning to merge these two together and fortify the capabilities of our fraud prevention system that can help our clients through a data enrichment API for phone, email devices, and a full-scale fraud prevention platform.

When talking about risk management, you often mention chargebacks as an important issue that needs to be addressed by every business owner. What are they, and what problems do they cause?

It is indeed a serious issue that is becoming quite common amongst online retailers. To give you a brief explanation, chargebacks occur when a credit-card holder requests that their bank processes a refund due to a fraudulent or disputed transaction. Originally, a chargeback process is designed to protect customers, but unfortunately, it can also be used maliciously.

The main problem with chargebacks is when someone claims to be dissatisfied with a product they bought online or when someone fraudulently uses a card without the owner’s knowledge. In these instances, the account holder can claim a forced reversal of funds back to their bank account – or chargeback.

The funds have to be taken from the merchant’s account and sent back to the customer. Furthermore, a penalty fee is incurred here for online merchants.

How did the COVID-19 pandemic affect the way fraudsters operate? Did you introduce any new features to SEON as a result?

Because of the ever-limited access to physical purchase and in-person services due to lockdowns and curfew, many businesses were forced to operate online. For many, digital operations like online retailers are a brand new concept, making them quite susceptible to fraud. This gave fraudsters a wide range of opportunities to exploit the new entrants into the online space.

We've heard insane stories about how they abused the situation and found workarounds for single-point security solutions such as ID checks, how they launched massive phishing campaigns, how they lured innocent people into beating KYC checks with the false promise of relief funds, and so on.

The bitter irony of our success is that it's a lagging indicator of the success of fraudsters. We've seen growth in a variety of industries from online gambling to online lending in multiple geographical areas - markets, whereas fraudsters will have a field day beating existing security checks. As a result, we had to cover more and more digital platforms within our solution, come up with even better rules based on the data, offer our help & support to our clients so they could scale their defenses.

Aside from financial gain, what are other things that motivate cybercriminals?

In many cases, data breaches and account takeovers are done in hopes of controlling someone’s business operations or acquiring personal data, pushing for activism, cyber theft, or espionage. However, the end goal of the majority of cybercriminals will always be to generate more profit.

Which characteristics make someone an attractive target for fraudsters?

If I had the same intentions as the average fraudster, my primary targets would be uninformed and gullible business owners. Their focus would rest on high-value goods, online services, and anything with a quick option to cash out. These could be signing bonuses or online loans. From our experience, we’ve come to witness that fraudsters are lazy. They want money, and they want it fast.

What fraud methods do you think are the most prominent nowadays? Are there any signs that can help identify them before any damage is done?

Earlier, we did a global cybercrime report where we researched the most common types of fraud happening (mainly in the US) and discovered that email phishing and pharming are the most frequent. In fact, email phishing and pharming accounted for 32.96% of all reported cybercrime in the country in 2020. This is no wonder since fraudsters tend to use very similar methods to attack their victims.

In your opinion, which industries should be the most concerned with implementing proper fraud prevention measures?

This is hard to say since all online operations that lack the right methods and knowledge in fraud prevention can be a victim of fraud.

But if we have to point out one amongst the many, online retailers can be a good example. Why is that? Because as mentioned, email phishing, reverse chargebacks, non-payment, and email spoofing are quite common. Since many companies were forced to go online, fraudsters can now cherrypick the most gullible retailer and continue defrauding them.

And finally, what’s next for SEON?

As businesses tend to go more and more digital, our experience tells us that even key players and larger entities are still unprepared for the risks that lie online.

While a majority of fraud happens the same way like email phishing, chargebacks, or account takeovers, we’ve seen new forms of fraud developing. In the past, we’ve observed that there is a rise in synthetic identities, deepfakes in CEO fraud, or attempts to beat ID checks when it comes to weak KYC verification. .

Our plan for the future is to detect these new forms of fraud and continue what we do best: fight fraud!

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