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Carousell cuts fraud rate by 44% over past year, to launch new features this week
CAROUSELL on Monday said the company's fraud rate has declined by 44 per cent over the past 12 months, and announced that it will launch two new product features later this week.
By the fourth quarter of 2018, the online marketplace had a fraud rate of 0.031 per cent, or about three in 10,000 transactions were fraudulent.
This was achieved via improvements to product and engineering, investment in human resources, and a collaboration with the authorities to increase consumer education, Carousell said.
Last July, the firm launched its new integrated payments system, CarouPay, to offer easier and safer options to arrange a deal.
"As an escrow service, funds will be held by Carousell, and only released after successful delivery of an item.
"In addition, a feature enhancement, CarouPay Protection, was made in the last quarter of 2018 to provide users with the function of freezing funds in the event of a dispute, until a resolution is met," the company said.
It added that it has been employing technology such as artificial intelligence as its first line of defence in combating fraud at scale.
"In order to further improve detection and prevent scams, Carousell has increased its investment in machine learning by five times since last year, and partnered with Sift, a fraud detection solution."
According to the company, Sift combines Big Data and machine learning to spot patterns and detect malicious online content such as fake accounts, payment fraud, account takeover, and content abuse to streamline and prevent fraudulent activities.
Following Sift’s introduction to the platform, an average of one in two, or 53 per cent, of all fraudulent activity in the fourth quarter were detected and taken down automatically, up from an average of 16 per cent in the third quarter, Carousell said.
Besides expanding its team with the hiring of ex-SPH (Singapore Press Holdings) deputy marketing chief Tan Su Lin as its vice-president of operations, and payments fraud specialist Evelyn Zhou, the company has also doubled the size of its content moderators to enhance coverage and speed.
As a result, the percentage of user reports that are manually reviewed under an hour have increased from 26 per cent in July 2018, to 75 per cent in December 2018, it said.
Separately, Carousell also announced that it will be launching two product features within the next few days. These include a star rating-system that allows users to rate various aspects of the deal based on their experiences; and a digital fingerprint technology to tighten the account creation process, preventing bad actors from returning to the platform, the company said.