PayPal CISO outlines antifraud strategy

What PayPal is doing to combat online fraud

PayPal has 133 million customers that use its Internet-based money-transfer service, which handled US$37 billion in transactions last year. Michael Barrett, who is CISO at the eBay subsidiary, recently spoke with Network World senior editor Ellen Messmer about new approaches PayPal is taking to combat online fraud.

Almost every day I get a fake PayPal e-mail that's obviously a phishing scam. How do you deal with this phishing fraud or even use e-mail to communicate with PayPal customers?

There's a lot of spoofing of eBay.com and PayPal.com. We get e-mail from customers asking questions about this and other topics and we respond within 15 minutes. We use our own Web-based e-mail to communicate. The problem with phishing and spoofing generally is there's no magic bullet. So it's classic defense in depth.

How much fraud hits PayPal each year?

As a class of operational loss, it's 0.41 percent. In the industry, that's known as 41 basis points, which is pretty low. When our customers are victimized, their user ID and password are compromised, we compensate them.

What are some of your defensive strategies?

If the consumer actually never actually saw the phish e-mail, it's hard for the criminal to victimize you. We're working with people who make e-mail clients and the ISPs, such as Yahoo, MSN and AOL, on a technical strategy that says if the e-mail is not signed by us, drop it. We're having good discussions, but we have nothing to announce now.

What specifically do you do today?

We believe in consumer training, and we have a "Think before you click on a link" program. We've also begun supporting the Extended Validation SSL certificate for safe browsing, which gives consumers the green glow in the Internet Explorer 7 browser. The Internet Explorer 7.0 antiphishing filter works very well with black lists of sites updated regularly. If there's a big red URL bar, you're attempting to browse a URL site it would recommend you not.

This week we're also launching the PayPal Security Key in the United States, Australia and Germany. You log on with your PayPal ID and password and then also use a dynamic password generated by a keyfob made by VeriSign. Use of this is voluntary and we're supplying the keyfob on request for a nominal $5 charge, which doesn't even cover the cost. It will even be free for certain business customers, and we may decide it's mandatory for specific business segments.

Are there changes in general you think would help combat online fraud, which is global in nature?

There's a lot of fraud here, a lot in Eastern Europe and elsewhere. We have a large team of fraud investigators at both eBay and PayPal. It would help if there were harmonization of laws internationally in sentencing guidelines. There is simply a patchwork of laws everywhere.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ellen Messmer

Network World
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?