lthough many consumers avoid making purchases online out of fear their credit card numbers will be stolen, it's often merchants who pay the hefty price for fraud - nearly $1 billion each year. Well, online merchants are fighting back. Many e-commerce companies have joined forces in hopes of thwarting fraudulent transactions and possibly catching some of the crooks.

The organization, called the Internet Merchant Fraud Roundtable, consists of representatives from more than 65 companies, including Hewlett-Packard and Expedia, Inc. The organization's goal is to create a giant database of stolen credit card information that many merchants can add information to and refer to in hopes of preventing criminal transactions, the New York Times reported.

A database of this size would also be a lot for any single merchant or group of merchants to manage, so the Roundtable is looking to create a separate entity to oversee the operation. Roundtable representatives have had merger discussions with Merchant Fraud Squad, an online fraud-prevention organization partly founded by Expedia.

The Roundtable's goal follows a somewhat similar effort by CardCops, an antifraud group that collects credit card numbers from Internet chat rooms where thieves exchange stolen card numbers ("Web Site Cracks Down on Credit Card Fraud," The Green Sheet, FYISOs, July 22, 2002, issue 02:07:02). CardCops offers this database on its secure, free Web site, www.cardcops.com, where credit card holders can type in their credit card number to see if it may have been stolen.

For many, a question of privacy arises any time the word "database" is used. The Roundtable says it is carefully considering this issue and has been consulting with several independent privacy authorities. The information captured in the database would be limited and would not include names, addresses or other personally identifiable information.

The Roundtable hopes to have its database up and running by the first half of 2003.