Fraud :: essays research papers

                         FRAUDMANY OF MY FRIENDS and acquaintances are save reluctant to habituate their credit- account numbers on the Internet, even to buy from known merchants over secure connections, and even when their credit-card issuers offer full protection against unsound charges. This side of the Internet fraud problem has received much much attention than the other side that Internet merchants have no rightfully effective way to protect themselves against credit-card fraud.Standard credit-card processing software go away give the merchant an approval if the card account is valid, and has enough commit credit to cover the sale. For cards issued by U.S. banks, there is an additional guarantor feature called Address Verification System, or AVS. This compares the complaint address associated with the card with the one entered by the merchant. The system works fairly well for goods shipped to billing addresses in the U.S.But there are two major gaps in protection. First, and most seriously, there is no AVS for cards issued by foreign banks. In other words, there is no way for a merchant to use the standard credit-card processing system to guarantee that a foreign credit-card operation is valid. This forces them to use heuristic, and sometimes arbitrary, measures for fraud screening. My company, for example, wont fulfill orders from Romania, having been burned a some times too many. Customers with hotmail or other free, Web-based e-mail accounts have a point or two against them. Express shipping, say many items, and ordering the latest games (instead of reference or educational software) all reduce the likeliness that well accept the order. The case is similar for U.S. cards when the goods are shipped to an address other than the cards billing address.If we figure ravish and ship an order that turns out to be fraudulent - we usually find ou t months later - we get a "chargeback," meaning that the amount we received for the order is taken back from us. If we guess wrong the other way, refusing to ship a legitimate order, we risk alien potential customers. My company manages to keep its chargbacks very low, but its frustrating to be in this situation where there is no way to avoid doing the wrong thing from time to time. There are commercial fraud-screening services that strain credit-card transactions automatically, applying these and other checks, but they are not perfect. We have had confine success referring fraudulent transactions to collection agencies.