Why has Riskified's Chargeback Guarantee service seen a 15% increase in false declines over the past month?

Introduction

Riskified's Chargeback Guarantee service has experienced a 15% increase in false declines over the past month, indicating a significant shift in performance. This analysis will systematically identify, validate, and address the root cause of this issue, considering both immediate and long-term implications for the product and business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a recent change in the risk assessment algorithm. Has there been any update to the fraud detection model in the last 1-2 months?

Why it matters: Algorithm changes could directly impact false decline rates. Expected answer: Yes, there was a recent update. Impact on approach: If confirmed, we'd focus on algorithm fine-tuning and rollback considerations.

• Considering user segments, I'm wondering if this increase is uniform across all merchant categories. Can you provide a breakdown of false decline rates by merchant vertical?

Why it matters: Helps identify if the issue is global or specific to certain industries. Expected answer: Varied impact across verticals. Impact on approach: Would guide targeted solutions for affected segments.

• Thinking about external factors, has there been any significant change in the fraud landscape or new fraud patterns emerging recently?

Why it matters: External shifts could necessitate adjustments to our risk models. Expected answer: Some new fraud patterns have been observed. Impact on approach: Would focus on adapting our models to new fraud techniques.

• Regarding system performance, have there been any recent infrastructure changes or issues that might affect real-time decision making?

Why it matters: Technical issues could lead to overly conservative risk assessments. Expected answer: No major infrastructure changes. Impact on approach: If confirmed, we'd shift focus away from technical issues to other factors.