Carousell cuts fraud rate by 44% over past year

Carousell yesterday said the company's fraud rate has declined by 44 per cent over the past 12 months, and announced it will launch two product features later this week.

By the fourth quarter of last year, the online marketplace had a fraud rate of 0.031 per cent, meaning 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 payment system CarouPay to offer easier and safer options to arrange a deal.

The company said: "As an escrow service, funds will be held by Carousell and released only 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."

It added that it has been employing technology such as artificial intelligence as its first line of defence in combating fraud at scale.

  • 53%

  • Percentage of fraudulent activity in the fourth quarter that was detected and taken down automatically, following the introduction of fraud detection solution Sift to the platform.

"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 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 was 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 former Singapore Press Holdings deputy marketing chief Tan Su Lin as its vice-president of operations, as well as payments fraud specialist Evelyn Zhou, the company has 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 has increased from 26 per cent in July last year to 75 per cent in December, it said.

Separately, Carousell also announced it would be launching two product features within the next few days.

They are a star-rating system that allows users to rate various aspects of a deal based on their experiences, and digital fingerprint technology to tighten the account creation process to prevent bad actors from returning to the platform, said the company.

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A version of this article appeared in the print edition of The Straits Times on February 19, 2019, with the headline Carousell cuts fraud rate by 44% over past year. Subscribe