I recently had the pleasure of attending and speaking at the Marketplace Risk Management Conference, the first and only conference focused on risk management, trust and safety, compliance, and legal strategy for online marketplaces. The conference convened over 150 speakers for more than 75 sessions with 600+ attendees focused on strategies and insights for the marketplace and sharing economy ecosystem.

During the conference, I spoke with experts from Google, TaskUs, and Adyen about various facets of fraud prevention on three separate panels: Understanding and Preventing Fake Online Reviews, How to Stay Ahead of Fraudulent Sellers, and Marketplace Collusion: What to look out for. Below are my top insights from these sessions, including the most pressing fraud trends impacting the marketplace industry today. 


Understanding and preventing fake online reviews

Fake reviews play a growing and detrimental impact on platforms. While high-quality interactions can drive growth, low-quality interactions have the potential to cause low engagement and churn. When users fall victim to scammers—or are even exposed to spammy content—they lose trust in other users and in the site itself. In many cases, this leads to lower levels of engagement and eventually user churn as they abandon the brand for others that offer a better, more secure experience. Marketplaces can get ahead of fake reviews by proactively applying machine learning to better track customer behavior throughout the user journey.

How marketplace collusion fraud stunts growth

Two-sided marketplaces can face multiple forms of fraud coming from the buyer and/or the seller, making the challenge of fighting fraud on these platforms even more complex. Collusion fraud, for example, occurs when a buyer and seller are the same individual or organization, using the marketplace to extract value from stolen credit cards. This type of collusion between a buyer and a seller can be incredibly costly for a marketplace. Businesses need to find these connections between users early and remove them—or face significant financial losses. 

Getting ahead of rising account takeover rates

Although less prevalent than traditional buyer fraud (e.g., using a stolen credit card to make a purchase), account takeover (ATO) can be the most damaging event on a marketplace. Merchants are difficult for marketplace platforms to acquire, and merchants can have a polarizing and rippling impact on a multitude of buyers on the platform, thanks to the network effect. In the event account takeover and payment fraud occur, marketplaces are generally going to “make the merchant whole” by paying the merchant for incurred fraud costs in order to avoid public scrutiny and keep the merchant on the platform, at great cost to the marketplace.  

There are multiple parts of an effective technology stack that help protect buyers, sellers, and marketplaces from ATO and minimize friction for trusted users. By implementing fraud prevention solutions like Sift at the point of login, marketplaces can better authenticate whether the person attempting to log in to the site is the legitimate owner of that account. This helps minimize friction for low-risk sessions while leveraging the power of 2FA or MFA and security notifications when something seems suspicious. Users who have MFA enabled are 99.9% less likely to be ATO’d compared to those without.

Fighting marketplace fraud with Digital Trust & Safety

Marketplaces face a multitude of fraud challenges, making it crucial to invest in effective, end-to-end solutions to fight payment fraud, ATO, and promo abuse. In order to mitigate abuse, marketplaces need a full-stack holistic solution. This is the only way to have a scalable and sustainable trust and safety program. Sift’s Digital Trust & Safety platform offers the ability to optimize user experiences based on risk through Dynamic Friction, so businesses can stop suspicious actions across the user journey and deliver seamless experiences for trusted users. 

Check out our Fraud Intelligence Center for more insights.

Related topics

Digital Trust and Safety


fraud prevention

marketplace risk conference


You may also like