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Turning the tables on shady retailers

Date

Matthew Hall

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If online shopping is the future, then consumers require protection from scammers, thieves, shady stores and rip-off merchants.

That is the belief of Katrina McKinnon, a former online marketing and e-commerce expert behind an Australian start-up that aims to tell shoppers whether the website they are using is reputable.

Alongside partner Luke Metcalfe, an obsessive data miner who launched the hit nationmaster.com website, McKinnon plans to turn the tables on retailers exploiting consumer data – and consumers – for profit.

Simply described, Verify1st is a free online tool - a website - that can reveal whether a retail website has a bad reputation, is a potential scam, or is linked to other websites or businesses of questionable intent. It gathers information from different sources to rate sites on trustworthiness, safety and vendor reliability, and exposes links they may have with other sites, social networking accounts, even phone numbers and IP addresses.

"E-commerce is a growing industry, but the tools aren't keeping up with the protection of online shoppers," McKinnon says.

"People are saying anecdotally that they don't shop as widely online as they should. There is a lot of trepidation. They will only shop at places they know or have heard of from friends and family.

"People do a lot of browsing but don't go through with the purchase. They just don't trust the retailers. It's a problem for consumers."

Verify1st's technology scans domain details, IP addresses and advertising data and then attempts to find links to other domains to test legitimacy of sites and associated businesses. It then reports back with data on reputation and identity.

A test run of the smh.com.au website returns mostly correct facts, but includes possible ownership connections where licensing arrangements are in place. At time of publishing Verify1st had not yet rated Clink Frenzy, the pop-up one day sale website which fell over on Tuesday due to unprecedented demand.

It had also not rated its own verify1st.com website.

McKinnon and Metcalfe claim to have crawled and indexed the top 18 million sites online and processed hundreds of millions of web pages.

McKinnon agrees that online retail verification is not unique – McAfee, Google and Web of Trust are just a few of the providers attempting to tackle the issue – but feels Verify1st has a crucial advantage.

"Our approach is unique in that it is proactive," she says. "Others rely on scammers being outed, whereas we map their tracks as they move and we're using machine learning to add more domains and identity signals."

The tool has attracted attention since a soft launch earlier this year.

Scott Yang, founder of Ozbargain.com.au, an Australian community-based online retail deal finder, sees a need for better data for online risk management, especially in retail.

"We currently do not have a way for community members to submit reviews on the merchants themselves," Yang says.

"We're looking for an automated way to show some kind of 'reputation' next to merchants to help our community members to decide whether something is a good deal or not. The same item at cheaper price might not necessarily be a good deal if it is from a merchant with a bad reputation."

Peter Cooper, founder of SydStart, a Sydney-based start-up networking conference, says: "EBay's early success was partially due to reputation scoring and it is one of Alibaba's challenges now.

"There are limited reputation sources that are independent of the marketplaces and few that are broad, deep and automated."

While Verify1st's founders are right in claiming online scamming is a problem for consumers, it is also a problem for smaller businesses – trusted large online retailers such as Amazon benefit from that distrust – and the banks that have to resolve scam issues.

A similar equation caused Yaron Samid, founder of successful US-based start-up BillGuard, to switch his product's focus from consumers to the financial services industry.

BillGuard uses big data and crowd sourcing to scan credit card transaction records for scams and can also act as a mediator between consumers, retailers and banks.

"All the complaints on the internet were just out there but not benefiting [anybody]," says Samid.

"We went out [with a consumer focus] and said this is the way it should work and bankers should deploy this in their banks. But nothing happened. Then we learnt helping consumers get their money back was the right way to start with banks. We learnt what not to sell to banks."

It's a fork in the road many start-ups face and the lucrative finance sector is a space where Verify1st may also find its market.

"That is something that has occurred to us but Luke and I have a longer history with consumers and small businesses," says McKinnon. "It's a really interesting idea. Would we take the tool down that path? Absolutely. Possibly."

4 comments

  • Zeroth commandment of online shopping: Trust word of mouth only. It it can be verified as safe (or fun, or important, or worthwhile) by multiple persons all of whom you trust (even more so if these people do not know one another), it should be given the green light. Otherwise, look elswewhere :)

    Commenter
    Black Palm
    Location
    Battambang
    Date and time
    November 22, 2012, 4:59PM
    • Either I, or the article is missing something as I cannot determine any advantage over what I already have with McAfee. A report is easily accessed for every site it has tested (not just 'relying on outing of scammers') which would have to be in the hundreds of millions given how rare it is not to have a green, yellow or red ranking for a site. Also integrated with my browser so that if I unknowingly try to go to a dodgy site it intervenes to advise against (which I can ignore if I am feeling brave). Why is this news?

      Commenter
      Dmnt
      Location
      NT
      Date and time
      November 22, 2012, 5:50PM
      • Verifying the bona fides of online companies is useful, but it has to go hand-in-glove with government regulation of online companies.

        I recently tried to purchase a holiday deal from Groupon, and found later that the small print required it to be booked by a certain date, which had by then passed. I sent them an email about this, asking if I could get a credit or a refund, which is what I would expect from a bricks and mortar supplier of similar services. I got a reply back saying they'd contact me soon, and nothing further. I sent them three more emails over three weeks and and only got a response after I mentioned publishing the problem.

        The kicker is that if I had checked on the company at all I wouldn't have tried to do business with them. Of 133 reviews of them on productreview.com.au, 123 rate them as 'Terrible'. The feeling I got was that Groupon is a company which does not seem to consider its reputation to be worth anything and treats its customers in a predator/prey relationship. As long as they operate in a self-regulated (i.e. non-regulated) environment, they'll presumably continue to thumb their noses at customers whose money they take without delivering services.

        Commenter
        Martin C
        Location
        Maroubra
        Date and time
        November 22, 2012, 5:55PM
        • I found it to inaccurate, showing domains, that were closed down years ago and no longer in existence, Telephone numbers that were just rubbish and what's the point of listing DNS servers, font links and other rubbish that the average shopper would have no idea what it's about

          Commenter
          Sam Grant
          Location
          Sydney
          Date and time
          November 23, 2012, 6:06AM
          Comments are now closed