In an effort to fend off online fraud, security vendor VeriSign Inc. unveiled Fraud Protection Services earlier this week.
Fraud Protection Services is managed by VeriSign and detects online transactions that have a probability of being fraudulent. Its fraud detection engine, developed by the vendor, is the primary technology being used to detect and monitor fraud, according to the company.
The system looks for three types of online fraud: product, identity and cash. Product theft is what the vendor refers to as virtual shoplifting, where a stolen credit card number is used to buy a good or service.
“In product theft, the transaction is screened through a set of databases and rules engines to identify patterns that we have defined as fraudulent patterns,” explained Trevor Healy, vice-president, VeriSign services in Mountain View, Calif.
In identity theft, a consumer’s identity is stolen from a merchant’s Web site, and usually involves database hacking. Healy noted if 20 or 30 different credit card numbers were being sent from one Internet Protocol (IP) address in the span of an hour, the system would detect that and alert the financial institution. Cash theft is commonly referred to as an account take-over, and involves issuing an unauthorized refund to a credit card, he said.
As each type of fraud is unique, the system is set up to handle each by specific parameters. If the system detects a potential fraudulent transaction, it will flag the transaction and the merchant will be notified.
“We hold the transaction mid-stream…we don’t let the settlement go through, meaning money is not taken from the person’s account until the merchant gives the okay,” he said.
Ultimately, it is up to the company or merchant to decide whether to accept or decline the flagged transaction. The merchant is contacted once the system detects the fraud, and if the transaction can be confirmed with the customer, the transaction is completed.
The service is available in Canada for merchants with the ability to process online transactions in U.S. funds.
The service works with several other authentication programs such as MasterCard International Inc.’s SecureCode and Visa International Inc.’s Verified, a Visa program, according to VeriSign.
The basic cost for the service is US$19.95 per month in addition to a US$0.05 fee per transaction.
The company is online at www.verisign.com.
