Addison Lee

IBM i2 solutions help the UK’s leading taxi service distinguish good passengers from fraudulent ones

Published on 27-Mar-2013

"IBM i2 products gave us real-time protection against fraud, as we were able to run incoming requests against our own intelligence in our existing fraud database and receive automatic alerts on any matches." - Mark Wilson, Fraud Control Manager, Addison Lee

Customer:
Addison Lee

Industry:
Travel & Transportation

Deployment country:
United Kingdom

Overview

At almost five times the size of its nearest competitor Addison Lee, a family run business established in 1975, is Europe’s largest minicab fleet. Booking close to 25,000 taxi requests a day, their mission is to pick up passengers within ten minutes of a call and drop them off at their desired location.

Business need:
On average, 10 percent of Addison Lee’s transactions are made with credit cards. For every fraudulent transaction processed with a stolen credit card, Addison Lee loses up to 150 percent of the sale because they are responsible for reimbursing the bank for the processed charge and paying the driver his/her commission for rendering the service.

Solution:
Addison Lee analyzed their existing data in order to organize it and apply risk scores to suspect identities. With their database organized and weighted, Addison Lee could then set alerts to those identities that scored highest in terms of potential fraudulent activity and proactively catch fraudulent transactions at the booking stages.

Benefits:
With the help of Analyst’s Notebook and iBase, Addison Lee reduced their fraud to sales ratio to less than 1 percent and reduced the charge backs they had to reimburse from as high as £1,400 per month to £60 per month.

Case Study

At almost five times the size of its nearest competitor Addison Lee, a family run business established in 1975, is Europe’s largest minicab fleet. Booking close to 25,000 taxi requests a day, their mission is to pick up passengers within ten minutes of a call and drop them off at their desired location.

Fraudulent transactions negatively impact revenue
On average, 10 percent of Addison Lee’s transactions are made with credit cards, and, due to the time sensitive nature of their business, the majority are made quickly online or over the phone. This kind of sales environment leaves companies like Addison Lee vulnerable to fraud as it is hard to verify these credit card transactions before the service is delivered. For every fraudulent transaction processed with a stolen credit card, Addison Lee loses up to 150 percent of the sale because they are responsible for both reimbursing the bank for the fraudulent charge and paying the driver his/her commission for rendering the service. Furthermore, the company is also susceptible to fines and penalty assessments from the banks and credit card holders. After conducting an internal review, Addison Lee discovered they had a 5-10 percent fraud to sales ratio.

Preventing fraud before it happens
In effort to protect their business from fraud, Addison Lee began to keep a database of their fraudulent transactions. The database allowed them to track caller names, phone numbers, pick-up and drop-off locations and credit card numbers associated with fraudulent transactions. With the database in place, Addison Lee was in need of a solution that could help them identify hidden links in their existing data and spot fraudulent transactions at the booking stage.

Initially, Addison Lee used IBM® i2® Analyst’s Notebook® to perform social network analysis on their existing data, applying weighing scores to those identities with the highest occurrences of fraudulent transactions and establishing links between pseudonyms, addresses, and phone numbers. With their database organized and weighted, they were then able to leverage the alerting capabilities of IBM® i2® iBase in order to proactively catch fraudulent transactions at the booking stage. As taxi requests were processed over the phones or online, the details of that request (including names, pick up and drop off locations, credit card numbers and phone numbers) were simultaneously run against the existing fraud database and alerts were sent out if any matches were found. The alerts enhanced Addison Lee’s intelligence, providing them with more information for their database and often times helping them prevent the transaction from happening by catching the driver en route.

Fraud screening yields multifaceted benefits
The fraud screening process that Addison Lee put in place has yielded many multifaceted benefits for the company. The program reduced their fraud to sales ratio to less than 1 percent and reduced the charge backs they had to reimburse from as high as £1,400 per month to £60 per month. This reduction in fraud has also significantly reduced their fines and assessment fees, which banks and credit card companies apply to businesses that are vulnerable to fraud. Furthermore, as IBM i2 products are already used by many financial institutions and law enforcement agencies, it is easier for Addison Lee to share intelligence with the appropriate officials who can investigate and stop the fraudulent criminals. With the help of IBM i2 solutions, Addison Lee is now equipped to protect their company from fraudulent charges, help ensure their drivers and employees remain available to serve their legitimate customers, and increase their revenue.

For more information
To learn more about IBM i2, please contact your IBM representative, or visit: ibm.com/i2software

To learn more about all of the IBM Smarter Cities solutions, visit: ibm.com/smartercities

Products and services used

IBM products and services that were used in this case study.

Software:
i2 iBase, i2 Analyst's Notebook

Legal Information

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