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More and more, tickets for sports and entertainment on the secondary market are going paperless. Customers, once they adapt to the technology, love it. Unfortunately, so do fraudsters.
Without paper, fraud is a lot harder to spot (that "T" in Toronto doesn't look quite right? You'd never know). Same with the anonymous seller the internet world brings - it's not like the days when you could size up a scalper outside a stadium and judge whether he's legit or trying to pull a fast one. For StubHub, the industry leader among online third party brokers, the spike in fraud in the paperless age was noticable. And risky. After all, the company guarantees its sellers will get paid and its buyers will get the seats they're expecting. While fraud doesn't make up a big percentage of overall transactions (less than 1%), it can generally eat away at customer satisfaction and, by extension, business.
Word of warning to would-be scammers: if you're thinking of selling a bogus ticket, there's a good chance StubHub will find you. In March of 2010, StubHub's Trust & Safety chief, Robert Capps, got a bunch of statisticians together to develop a model that would signal red flags for fraud alerts. "We locked them in a room for weeks and told them to come up with something," Capps told an audience at the MIT Sloan Sports Analytics Conference in Boston. Indeed, teams and sponsors arent' the only ones in the sports industry using advanced mertrics. Ticket brokers find them useful, too.
Drilling as far down the ticket buying game as possible, the StubHub crew came up with enough useful nuggets to reduce phony transactions by over 30% since 2010, according to Capps. Some of the indicators they came up with: the time and place of an event (it's more unusual in some markets than in others to list a ticket very shortly before game time, so when it does happen - red flag). Also: game location vs. ticket seller's location (is a guy in Michigan selling a Dallas Cowboys ticket with a credit card based in California?). Then there are the more intuitive things: juniior using the parents login ID or and credit card, or those no-harm-intended orders when buyers reneg based on remorse (or - husband buys tickets to the game, wife says you'll go ahead with payment over my dead body).
Basically, if you've got an online ticket scheme in mind, there's a good chance StubHub will find it. Its business depends on keeping the scalping business on the web clean.
