Fraudsters beware: Ebates.com (aff) has implemented a new technology that “pierces the proxy” to fight fraud. It’s called ThreatMatrix, and in a press release on Thursday, Ebates CEO Kevin Johnson and ThreatMatrix CEO Reed Taussig discuss the fraud issue and what Ebates is doing to address it.
The first and most obvious form of fraud is the use of stolen credit card numbers to make purchases at Ebates’ merchants. That’s one of the reasons they require members to wait through a “return period” before cashback rewards are sent out — in the hopes that before they pay cashback out to someone who used a stolen credit card, the cardholder will discover the theft and have the charges reversed. (Better then than AFTER Ebates has paid the thief the cashback!)
But Ebates also offers members a $5 bonus for referring a friend to the program, so there is also some potential for abuse there if people try to create fake accounts to take advantage of the bonuses.
Ebates apparently had some fraud prevention methods in place, for example to catch rebate checks being mailed out to referral abusers. But they also have a cashout option to PayPal which no doubt has made catching cheaters more difficult. This new ThreatMatrix software allows them to identify computers through the maze of “proxy servers” they use to try to conceal their identity…and stop scammers from registering for Ebates in the first place.
There’s a whole case study on this posted on ThreatMatrix’s website here. Interesting reading. Glad to hear that one of my favorite rewards programs is taking aggressive action to fight fraud. Ebates has been around since 1998 and I hope they’ll be around for a lot longer…at least until Google buys them out so they can compete with Bing! 
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