The Men (and Women) Behind the Curtains of today’s eCommerce Landscape

So who the hell is a company called Kount in Boise Idaho to sit in judgement of individuals and ‘advise’ thousands of online merchants whether they should treat members of the public as ‘valued customers’, or ‘petty criminals’.

Who are these people behind the curtain and why should online merchants even trust them?

My wife and I only learned about Kount through a customer service debacle by the outdoor apparel maker Arc’teryx based in Vancouver, BC. Arc’teryx had accepted and then rejected two online orders (days after placing $1,200 in ‘holds’ on credit cards!). My wife learned the hard way about the ugly underbelly of modern ecommerce.

A customer service agent at Arc’teryx had seen a Kount score of ‘62’ and decided to treat my wife like some petty criminal. What was a Kount score anyway? Why had the company determined that Arc’teryx staff should treat a very accomplished and very high net worth individual with an 800+ FICO® score like dirt and demand she email a photocopy of her credit card and driver’s license. (Go figure what Arc’teryx’s data security regime must look like and how safe customer credit card numbers must be!)

So this begs the wider question about the accuracy of ‘anti-fraud’ information and rating’s engines. It highlights the inability for individual's to get behind the curtain with these companies — to clear down what must be suspect or inaccurate information. Consumers can do that with FICO®, Experian® and other credit agencies, but what about the purveyors of opaque AI/algorithm driven judgements from companies like Kount — that clearly did the opposite of boost sales for Arc’teryx. In fact, in our case, they crushed a simple sale of a jacket for our son and helped make the Arc’teryx brand less than worthless for our family.

So far the CEO’s of both Arc’teryx and Kount have ignored my faxes looking for answers to really simple questions. It makes one think how both companies could get it so wrong in scoring, customer service and brand management. After all, if they can get it so badly wrong giving a VHNW person a ‘62’ (on a score of 1–99 and 99 is really bad!), surely on the other side of the equation they can easily allow others to get ‘good’ scores because the Kount algorithms are potentially so flawed.

We live in times when there are too many “men (and women) behind the curtains” in the ecommerce value chain awash in API driven connections. Executives of obscure entities clearly do not wish to or are unwilling to be held to account after having the temerity to arbitrarily rate the citizenry. Heck, they won’t even respond to questions from the people they are besmirching with a two digit number.

In a website ‘chat widget’ Kount’s staff admitted that they are supposed to be “totally behind the scenes” of Arc’teryx yet admitted they created my wife’s score that feeds thousands of online merchants. The chat agent was clear that Arc’teryx staff should not have “leaked” that Kount was in background or the score. Fast forward through the chat and Kount is absolving itself of all responsibility and saying this is an Arc’teryx problem. Really? You want to throw the now damaged consumer facing brand under the bus some more? So the ‘behind the scenes’ company is, according to their chat person, refusing to allow any consumer that they have maligned by inaccurate assessment any mechanism to challenge their opinion! Wow, that’s ballsy!

Are we headed toward a tipping point in brand credibility in ecommerce? I certainly think so and maybe merchants should think harder about which plugins to implement. Does the government now need to step in to protect the people from the opaque world of AI that draws on unknown data sources and then adjudicates who can and cannot buy products and service online?

What next? Does Uber or Lyft stop showing up because they implement Kount or some other ‘behind the curtain’ purveyor of inaccurate data that a consumer is prohibited from challenging?

Yep, I’ll be keeping my non-4G connected and non-self driving car for a long while because of companies like Kount — who clearly operate just below the surface of the ecommerce swamp.

All just one man’s opinion, of course. A Thinking Man.

~~ Article Update ~~2 days after posting the above opinion~~

The CEO of Kount reached out via phone. It’s 100% old-school, but 100% the correct response over such matters. It was 100% appreciated. Such a move is an incredibly rare response these days as more and more executives seem to use Customer Service and the “impenetrable wall”. For Kount it was great brand building 101. (As the company is lawyer-led, I did not expect the fax response to the simple questions, as requested!)

The call was insightful, but goes to the heart of the issue raised — your every transaction is building a potentially inaccurate map about you. I suspect that 99.9% of consumers have no clue about a score more powerful than a credit score, but everyone should. The ‘scoring platforms’ look at every purchase, chargeback (if any), purchase of a good/service from another country (in a different currency) and 100+ other variables about you and how you live.

It’s obvious that the models used are deeply flawed and need work.

“So can a consumer ask a ‘scoring platform’ like Kount for a rescore?” Absolutely not. As a consumer you cannot ask Kount or their competitors to review and change their algorithmic opinion on you. Period. End of story. Yet these companies earn millions sitting in judgement on private citizens based on their “billions of transactions” — and most scary of all in this hyper-efficient eCommerce swampland, they are passing judgement with their assessment of your device settings, ad-blocking at time of purchase and more. That’s right, they are not just interested in seeing the ‘history’ they are reaching down to the device you are using and if they don’t like what they see at the device or network level, then they will use that to help a merchant block an order. Heaven help anyone using ad and cookie blockers! To see how invasive these ratings companies are behind your next purchase, take a look at this patent; “”. It makes the Snowden disclosed NSA Prism program look positively benign.

I am convinced from the call that AI and psuedo-AI are just not sufficiently well developed to adjust for internationally mobile and privacy-minded people in our society. If you travel a lot, buy in multiple locations and in multiple currencies (as our family does) then clearly the odds are stacking up fast against you in the AI future of real-time assessments of who get’s what service and when.

Merchants will also continue to get faulty data from anti-fraud scoring engines if the ratings companies do not allow consumer input (think how much Kount could charge consumers for that option!). Until then, these “not be to leaked” anti-fraud engines need to have the bright light of regulation and transparency hit them as they truly hurt and interfere with consumers engaging in commerce. While they are not a FICO® or Experian® per se, they are arguably for more dangerous for Joe or Jane Consumer just wishing to access products and services online.

Finally, still no word from the CEO (or anyone) at Arc’teryx, but to paraphrase Mr Wonderful from Shark Tank; “they are dead to us”.

All just one man’s opinion, of course. A Thinking Man.

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