Shell’s Fraud and Risk Manager on Card Present Fraud

Podcast

Fraud Fighter – Shell on Card Present Fraud

Sorin Hazu, Fraud Risk Manager at Shell, shares some insights on card-present fraud, and where the field is headed.

Sorin Hazu has worked in risk management for more than 10 years, in turn with a focus on customer services (Avangate), and as a payments consultant for PayPal. In short, his impressive career covers almost all aspects of risk management. But in recent years, he became more interested in a different kind of fraud, which he fights tirelessly at his new company, the multinational oil and gas company, Shell. Here are five key things we learnt in our podcast interview with Sorin.

#1 Card Present Fraud is a Completely Different World

One of the biggest challenges when Sorin started at Shell, was that he was moving to the world of card-present payments. This is applicable to gas station payments, fuel cards, but also in a B2B context, as Shell hire out a fleet of vehicles across the EU region. As Sorin put it:

“Why it was interesting for me was mainly that Shell operates their own acquiring and own issuing. So they control the whole value chain, what we would call a closed-loop solution. So while within the traditional payments industry, for instance, MasterCard, provides an open loop with branded cards, any player in the industry can brand their own Shell cards. Shell controls the whole value chain, and that’s really made it interesting for me to learn how that kind of acquiring and issuing functions from the inside.”

#2 Fraudsters Found a Way Around EMV Compliant Cards

Inevitably, where there’s money involved, there’s fraud. Sorin explains how that works with Shell:

“Shell cards are EMV compliant, which means they’re chip and PIN. However, one of the main challenges that I see is with every solution supplier in the market, is a piece of functionality which we call a fallback mechanism to Magstripe.”

Sorin explains that when a chip and PIN card is damaged, it is designed to fall back on the Magstripe (the stripe at the back) to be read.

Realistically, chips on cards should rarely fail. But from a fraudster perspective, this is a golden opportunity, particularly for stolen or counterfeit cards. – Sorin Hazu Share on X

#3 Shell Expects Fraud Rates to Boom Post-Pandemic

Fuel card fraud obviously decreased during the pandemic. Shell actually contacted other suppliers to confirm their numbers were right. But rather than rest on their laurels, the fraud prevention team is doubling their efforts, as they expect the rates to boom when normal travelling conditions return.

“Our experts are actually pushing even harder for the business to increase chip and PIN penetration, clearly knowing that after the pandemic or the restrictions and free flow of circulation end, fraud is likely to rocket again. Fraudsters are actually humans too and were likely blocked indoors with little to no revenue sources. They’re probably turning towards online fraud, but as soon as the restrictions are lifted, fraud will go triple-fold up in terms of percentage.”

#4 Shell Has Strong RiskOps Internal Training

Like in many of our other podcast interviews, the conversation turned to RiskOps career paths.

“How did you land actually in the fraud-fighting world? That’s one question my mom asks every now and then, because there are no schools for fighting fraud. There are plenty of online materials that you can actually read and podcasts such as this one. Also, online working groups where you can get a lot of experience from different verticals and different industries and different parts of the value chain. Because fraud might look completely different in the shoes of a payment service provider or in the shoes of a merchant.”

Still, Sorin benefited from his colleagues at Shell’s experience, as well as strong internal training.

“I would say the vast majority of information I’ve acquired was from my colleagues. They were deeply experienced in this type of fraud and they were having under their belts at least five, 10 years working specifically with fuel card fraud, including my manager. There is also this thing called the Shell open university, where you can actually learn every aspect of the business.”

#5 Fraud Fighting as a Whole is Moving Towards Data Science and AI

Finally, this won’t come as a surprise for many, but Sorin confirmed that fraud management is increasingly becoming linked with data science.

“The role of the fraud analysts decreases from working with large amounts of data in Excel or a business intelligence platform. I think that role is fastly transitioning towards a more analytics-based approach. Data scientists or data analysts have become partners in the process. So I wouldn’t say go learn mathematics and become a data scientist if you are not born for it, but definitely, if you have skills in that direction, I think that’s the future of effective fraud-fighting.”

We’ve spoken to various fraud fighters on the SEON Cat & Mouse Podcast, and every new interview highlights a new facet of fraud.

Card present fraud is a completely different beast from, say, account takeover or multi-accounting, but it’s interesting to see that there are a few constants, namely that all fraud prevention is expected to boom because of the pandemic, and that AI or machine learning is the way to go.

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