EPrize Aims to Safeguard Online Contests From Fraud

Interactive promotions agency ePrize LLC introduces a service today to cut the number of fraudulent entries in online promotions.

The screening tactic aims to protect ePrize clients from consumers who abuse promotional sweepstakes, games or contests before, during or at the point of registration. The name for the system: Promotion SAFE, an acronym for Secure Anti-Fraud Environment.

“What's happened over time is that people have gotten more sophisticated about the Internet and attempts to game the system,” said Robb Lippitt, ePrize chief operating officer and general counsel. “They've started cheating. They're using bots, multiple e-mail addresses, multiple first names — all those different ways to try and get extra chances to win. We felt it was important for us to take strong proactive steps to stop such fraud.”

An estimate from CyberSource claims fraudulent online practices of all types last year cost merchants $2.6 billion. Estimates of the dollar cost of frauds related to online promotions are harder to come by. However, the growth of such costs persuaded ePrize to proceed with its new proprietary solution.

Promotion SAFE has five elements to detect and block fraudulent participants.

Take IP Blocking, for example. A Web page informs players that their IP address has been associated with prior fraudulent attempts, shutting them out of any ePrize promotion.

Image Security is another protection. Already used by companies like domain name registrar Register.com and Ticketmaster, this tool asks entrants to verify text from a random image on the screen to proceed further into the promotion. This technique effectively blocks bots from automatically submitting entries to increase the chances of winning.

Then there is Address Verification, which is used to verify mailing addresses against the U.S. Postal Service database.

Also, ePrize is de-duping to screen people who enter many individuals under the same address. Such people can be filtered out if the information they provide matches data of a similarly registered profile.

Finally, ePrize maintains a global master list of previous fraudulent offenders, preventing them from entering upcoming promotions for any company client. This blacklist is easily compiled because ePrize is one of the largest online promotion agencies.

“We feel that you could find 3 percent to 5 percent of entries in [online] promotions that traditionally have a fraudulent origin, which is obviously significant when you see the cost of that to marketers,” Lippitt said. “When you're trying to get data, a lot of back-end scrubbing has to take place.

“It puts a strain on the systems of the promotion, with additional hosting costs and bandwidth costs, and it really doesn't create the ideal experience for those consumers who are trying to play the games fairly.”

EPrize executes online promotions for brands like Procter & Gamble Co., General Motors Corp., Harrah's, American Express Co., Coca-Cola Co., Warner Bros., palmOne, Gap Inc., Dell Inc., Ford Motor Co., Northwest Airlines, Unilever, Yahoo and The Home Depot. EPrize's revenue last year more than doubled from $9 million to $18.5 million, aided by the addition of 80 brand-name accounts.

Promotion SAFE will be standard in every online promotion handled by ePrize. Clients can opt out of some parts of the system.

“We're offering this to clients at the total additional cost of zero dollars,” Lippitt said. “We feel this is the right way to do online promotions.”

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