Could behavioral biometrics have put a toddler with an itchy shopping finger in time out? 

In case you missed one of the most adorable stories of the year to date, here’s the background. A New Jersey family started receiving deliveries for furniture that they had no recollection of ordering. The items had been loaded in an online shopping cart, but the mother, father, and two older children didn’t complete the purchase. 

That left one suspect: the family’s 22-month-old son.

It turns out that the toddler had been playing with his mother’s phone. Without even realizing it, he purchased over $1,800 in furniture that was left in an online shopping cart. By the time the family realized what had happened, it was already too late to cancel the purchases. 

Family Fraud vs. Friendly Fraud

The story of the toddler’s accidental shopping spree is nothing short of heartwarming and sweet. It’s also a textbook example of “family fraud” – in which a family member (typically a child) pays for something using the primary cardholder’s card (usually their parent). However, not every case of  family fraud ends up as an adorable and shareable social media phenomenon. More serious cases of family fraud can involve elder abuse or fraud in which a relative or close friend exploits their relationship with a loved one for financial gain.

On the other hand, friendly fraud is more commonly associated with chargeback fraud or auto fraud. In an example of this type of fraud, a consumer orders a product online. After receiving the order, they (falsely) claim the purchase was made fraudulently and demand a refund. When the refund is issued, they keep the product and resell it at a profit.

The latest research from Aite-Novarica Group, a global research and advisory firm, finds 17% of respondents reported their stolen information was used to open a checking account. Meanwhile, 15% said their information was used to open credit cards, and another 12% said it was used to acquire a new mobile phone.

Behavioral Biometrics 101

Behavioral biometrics is a highly effective method to stop family fraud in all its forms, from innocent toddler mishaps to deliberate and malicious acts. Behavioral biometrics develops a deep understanding of how customers normally behave, preventing account takeover fraud or other types of identity theft before any harm is done.

This understanding includes how a person normally handles their phone and interacts with their screen. Behavioral biometric solutions collect data on how users type, the direction they normally swipe on their phone screens, or how they handle a mouse or touchpad. These insights are critical to understanding whether the person handling a mobile device is the legitimate owner (of adult age) or a young child pushing buttons who doesn’t understand what they’re doing.

Having behavioral biometrics solutions in place – combined with behavioral analytics solutions, which analyzes what users do on their devices and how they do it by looking at unusual times of day to log in or unfamiliar geolocations – is critical to preventing fraud before it can even reach the transaction stage.

Are You Really You?

Behavioral biometrics (combined with behavioral analytics, malware detection, and other safeguards) is an important component for banks to trust their customers and ask the question “are you really you?” at each step of their journey. Having this type of solution in place that can read the gestures and hand motions of the user could mean the difference between stopping an unauthorized or unintentional purchase and getting stuck with furniture you can’t return.

At the end of the day, a toddler buying furniture accidentally will make for some hilarious headlines, and the family will laugh about it for years. But this outcome is one of the rosiest (and rarest) imaginable. Other customers may be victimized by intentional fraud and have to deal with the financial fallout. That’s why banks should prioritize ensuring their customers are who they claim to be and feel confident they can trust them based on their movements and gestures.

The technology to stop family fraud is widely available. Once the technology is in place, decisions over whether to trust a customer’s purchasing decision should be….well, child’s play.

How can European businesses increase profits while decreasing fraud losses? Watch our engaging webinar Beyond Borders: Approving Good Customers from Anywhere to learn more.