Case study

CASE STUDY: Giving customers better protection while reducing costs

Monday 2 December 2013 | 09:50 AM CET has less fraud and happier customers with ThreatMetrix is one of Germany’s leading online marketplaces, offering free classified ads along with online stores. In the tradition of a real marketplace, it also acts as a meeting place for the exchange of ideas and contacts. Buyers and sellers meet on the website and execute transactions, and professional merchants sell products directly from their own stores

But with 250,000 daily visitors and 2 million active ads within an online marketplace, is a prime target for payment fraud and other cybercrimes. knew from the outset that its long-term success was dependent upon establishing and maintaining trust between buyers and sellers. So it continually invested a lot of time and effort in identifying ever-changing risks and developing mitigation strategies. The key risks they have identified are:

• Fraudulent Ads
Scammers place ads for bogus goods or services in an attempt to lure buyers to make a transaction or give up personal credit card or account information.

• Fake Buyers
An advertiser is contacted by a fake buyer who cons them into providing goods or services that are paid for with bad checks or phony credit cards.

• International Cybercriminal ‘Mafias’
Using proxy servers, these ‘mafias’ run a variety of sophisticated scams, including credit card fraud.

• Phishing
Cybercriminals try to work the website to get email addresses of buyers and sellers, then run phishing scams.

To build its reputation as a trusted online marketplace, developed proprietary algorithms to check ads for suspicious wording, profile professional sellers and track unusual website activity. It also blocked website access using geo-IP, although this was often circumvented by ‘cloaking’ of IP addresses. As potential fraud instances were identified, each was moderated by personnel.

This proprietary process initially enabled to establish a trusted web environment. But over time, as website traffic increased, maintaining it became very labour intensive. And as cyber scams became more sophisticated, it became less and less effective.

To guard its outstanding reputation and simplify workflow, began searching for an online fraud solution that could mitigate its specific fraud risks more completely and efficiently. At the same time, the solution needed to be automated, flexible, scalable and easy to implement. After a thorough evaluation of leading online fraud vendors, determined that ThreatMetrix could provide the best online fraud solution that met all its criteria. Other keys to the decision to choose ThreatMetrix were the know-how that it accumulated over time, especially in e-commerce, and its powerful Global Intelligence Network.

Clemens Henle, Chief Operating Officer, said: “ThreatMetrix helps us maintain our outstanding reputation by protecting our customers. Plus, we are growing our business because ThreatMetrix keeps customers from being unhappy.”

Even with thousands of ads and contacts being made every day, ThreatMetrix has greatly simplified’s fraud identification processes. Based on’s operating experience and ThreatMetrix’ deep understanding of the behaviour of scammers and cybercriminals, is able to create rules that identify suspicious actions.

ThreatMetrix data is used to develop complete profiles of all suspicious interactions and these are either automatically blocked by rule or sent to be moderated by individuals. With ThreatMetrix, the number of instances requiring moderation has been greatly reduced. Plus, when moderation is necessary, ThreatMetrix data is fed into the platform where all information about the suspicious interaction is collated. This enables the moderator to make a fully informed decision, which significantly reduces the risk of blocking genuine interactions.

According to Andreas Baumhof, ThreatMetrix CTO, “ThreatMetrix has made it much easier for to identify suspicious interactions. The comprehensive real-time data we provide also makes it easier for moderators to make correct decisions.” also credits ThreatMetrix with helping improve its bottom line. Costs have gone down significantly, as much of the manual effort in proof reading and evaluating ads is now done automatically. There are fewer complaints to handle and fewer issues to resolve.

Most importantly, has seen a significant reduction in the number of fraud events experienced by customers.

Now, has the confidence to plan future expansion that includes bringing more e-commerce stores online. To enhance its offering, plans to give these new online stores the option to implement ThreatMetrix’ solutions.

About Andreas Baumhof, Chief Technology Officer, ThreatMetrix

Andreas Baumhof is an internationally renowned cybersecurity thought leader and expert with deep experience in the encryption, PKI, malware and phishing markets. Prior to ThreatMetrix, Mr. Baumhof was an executive director, CEO and co-founder of Australian-based TrustDefender and co-founder and chief technology officer of Microdasys, Inc. While there, he developed the first SSL proxy and has patents pending in Europe and the US.


ThreatMetrix secures web transactions against account takeover, payment fraud, identity spoofing, malware, and data breaches. The ThreatMetrix Global Trust Intelligence Network, which analyzes 500 million monthly transactions, provides context-based authentication and Web fraud prevention to help companies accelerate revenue, reduce costs and eliminate friction. ThreatMetrix protects more than 1,900 customers and 9,000 websites across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

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