Re: UKNM: Re: Credit Card Fraud

[Mike Rich]

What is the difference - and I ask this as a novice - between an Internet

transaction and any other sort of transaction - phone, over the counter?

I ask this a) because of an interest in ecommerce b) in the last few weeks

the hole in the wall did not deliver the cash it billed me for - and I (after

a creditworthy record of more years than I care to think of) am made to feel

like a criminal in trying to get my money back? So what is wrong with the

banks?


Marcus Austin wrote:


> At last someone is starting to listen to what we've been saying for the

> last 12 months. Chargebacks and customer perpetrated fraud is the real

> problem with commerce on the Net, and part of the problem is the credit

> card processing agents and the cc companies. Amongst other things CC

> companies are very slow at passing on stolen card lists and processors

> unintentionally hide a lot of the information that a merchant would find

> useful to check against fraud such as the cc name ie R Branson, multiple

> deliveries to multiple addresses using the same cc details. If i was a

> merchant i'd be asking marbles etc what rights i have against fraud using

> marbles cards, because at the moment it seems to be zero.

>

> I have included some para's from a letter we received recently that might

> help illustrate some of the problems.

>

> Roll on SET !!!

>

> Marcus

>

> The acquiring banks, such as NatWest Streamline and Barclays Merchant

> Services, provide online credit card authorisations but these only

> involve minimal checking. They check that the card number is

> mathematically correct and that it has not been reported stolen or has

> expired, but true transaction authorisations are a myth, they do not

> occur at the time of purchase. Transaction Authorisations only occur once

> the bank issuing the card has been advised of the transaction. This

> typically takes between three and six months, leaving the merchant

> exposed to the possibility of a "chargeback" long after the goods have

> been delivered.

>

> In reality, online authorisation provides the merchant with little or no

> reassurance that the card number is not fraudulent. Many of the issuing

> banks remain highly secretive about their credit card business and do not

> advise the acquiring banks of stolen numbers.  UK card issuers maintain a

> list of stolen card numbers for the acquiring banks to check. However,

> Continental European banks have, largely, yet to follow this lead, even

> UK and US banks still take too long or simply forget to register stolen

> card numbers.  The merchant is therefore placed at higher risk of online

> fraud.

>

> The Internet businesses that are most vulnerable to online fraud are

> those that provide consumers with online authorisation of their credit

> card payment using recognised payment processors like WordPay and

> Netbanx. Merchants in this situation do not normally see customers'

> credit card numbers as these are passed directly to the payment

> processor's secure server. Although this may provide the consumer with

> more confidence, it prevents the merchant from spotting the signs of

> fraudulent orders, for example doubtful sequences of card numbers.

>

> If you are suspicious of a transaction, you need to confirm the

> cardholder has made the order. You can't do this unless you obtain the

> card number and expiry date from the payment processor and request

> verification of the cardholder's address from the acquiring bank. The

> acquiring bank then contacts the issuing bank and, if you are lucky, it

> will agree to help you in your enquiries. Unfortunately, confirming the

> cardholder's address will not always be sufficient and you may need to

> contact the cardholder to confirm the transaction is legitimate. For the

> consumer, this additional checking can be irritating but for the merchant

> it can be the difference between profit and loss.

> Marcus Austin - Senior Editor

> Internet Works

> Future Network PLC,

> 30 Monmouth St,

> Bath,

> BA1 2BW

> www.iwks.com

> tel +44 (0)1225-442244

> Fax +44 (0)1225-822744



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