Updated Credit Card Fraud Information

Eric Thomson's article "Latest Trends in Online Credit Card Fraud -- and Preventing It" (Green Sheet, Jan. 27, 2003, issue 03:01:02) was right on target. Please note that his reference to the CyberSource Fraud Report was a little out of date, however. We made the Fourth Edition of our report available at the end of 2002, covering survey data fielded in October 2002. Your readers can access it, free of charge, from our home page, at www.cybersource.com.

Bruce Frymire

Director, Corporate Communications

CyberSource Corp.

Bruce:

Thank you for your generous comments. Yes, that piece was written last fall. We have seen your latest survey results. They represent an important contribution to the retailer's understanding and progress in combating online fraud.

Good Selling!^SM The Green Sheet Staff

I was impressed with the way Eric Thomson's White Paper, "Latest Trends in Online Credit Card Fraud -- and Preventing It," distilled a lot of information down into something digestible. A couple of comments: 1. Don't you think that quoting research that was published 18 to 24 months ago is a bit dated to be labeled "Latest Trends"? 2. Noticeably omitted from the article were Verified by Visa and MasterCard's SPA, which are the two "latest, greatest" verification panaceas being foisted onto the merchants, issuers and acquirers. Additionally, several relatively new techniques that we, at Retail Decisions, have found extremely helpful in identifying potentially fraudulent transactions also were not mentioned: Distributed Velocity Checks and Tumbling and Swapping detection. My company keeps a somewhat lower profile than CyberSource and ClearCommerce, but we provide 100% of the online risk management to Wal-Mart Register.com, Palm and Foot Locker as well more than 80 other well known e-tailers. If you would like additional information about our fully managed fraud-detection service, please feel free to visit our Web site at www.liveprocessor.com and surf for "ebitGuard." Again, it was a nice effort and I'm sure many readers of The Green Sheet were interested to know what ClearCommerce and CyberSource had to say on the subject even if their information was a bit dated. Cheers,

Rayce Jonsrud

Director of Sales, Northeastern U.S.

ReD-USA

Eric's response:

Rayce,

Thank you for your e-mail and constructive comments. The Green Sheet has a backlog of my articles such as the one that was published in issue 03:01:02. As you mentioned, the subject of fraud prevention is one that is of increasing relevance to more and more retailers and the ISO community that serves them.

Also fueling the interest in this topic and the technology that companies like yours provide is the acknowledgement that Internet retailers experience fraud losses six times larger than card-present purchases. Not widely known is the fact that electronic retailers reject a further 6% of their consumer purchase requests because they "look suspicious." Further compounding the magnitude of revenue loss from fraud is the recently reported fact that 9% of retailers who used to accept international purchases no longer do so.

Good Selling!^SM

Eric Thomson