For more info on a specific newsletter, click the title. Details will be displayed in a new window.
Subscribe to
Computerworld 40 years of the most authoritative source of news and information for IT leaders.
E-merchants Turn Fraud-busters
or
Other Security Stories
|
|
|
|
June 16, 2003 (Computerworld) -- Nobody likes being ripped off. But for online retailers, the pain of being ripped off by unethical consumers, identity thieves and bogus-card gangs has been magnified by what they consider to be the not-my-problem attitude of credit card issuers and card associations like Visa and MasterCard.
Tom Mahoney, a network administrator at Franklin & Marshall College in Lancaster, Pa., recalls vividly the shock he and his wife felt shortly after they launched their own mom-and-pop e-business in 1997 and discovered not only the threat of fraud but also the double whammy from the credit card companies.
"We thought from the beginning something was fishy -- getting orders for herbs and personal care products with U.S. credit cards, all ... for shipping to Yugoslavia," says Mahoney. He recalls that his card processor had assured him that if he had an authorization number for the transaction, then "all was well." But then the chargebacks started coming in, and banks refused to honor the transactions and added penalty fees for Mahoney's business.
Mahoney says he called some of the banks and was shocked to discover that many of the credit card numbers in question had never even been issued to cardholders, yet they were granted authorization numbers. "That's when I learned that something was wrong with the system," he says.
Today, credit card fraud is pegged as a $160 million annual problem for just the top 25 online retailers, according to Gartner Inc. in Stamford, Conn. But there are some glimmers of hope for improvement.
One encouraging sign is that Visa International Inc. and MasterCard International Inc. recently started full-scale marketing of credit card systems that require online purchasers to supply additional passwords or security codes (Verify by Visa and MasterCard's similar SecureCode). It's an attempt to provide an online equivalent of the in-store signature. Even more important, from the retailers' perspective, merchants that join the programs will finally be freed from most of the liability and onerous chargebacks that so irked Mahoney. Instead, banks will absorb the costs of fraud themselves.
But merchants, analysts and even Foster City, Calif.-based Visa and Purchase, N.Y.-based MasterCard acknowledge that no one is out of the woods yet and that the new programs don't cover every situation. It may be a few more years before the two companies' programs reach critical mass and begin to show significant results. Plus, there's some concern that the pop-up window that requires the new codes will drive some legitimate customers away.
"The Visa and MasterCard programs won't solve all the problems. They are just one tool in the arsenal," says Mick Lester, director of Web services at KBToys.com, a Denver-based unit of KB Toys Inc. Still, he says, "with the liability shift to the card issuer, I definitely think merchants should jump aboard."
For now, Lester says that even with Verify by Visa and SecureCode, KBtoys.com won't abandon its homegrown fraud-busting methods, such as verifying and comparing card and shipping addresses, as well as flagging and scrutinizing transactions involving expensive items.
KBtoys.com also uses a scoring system to look for fraud, says Lester.
|
Print this Story |
|
Send Us Feedback |
|
E-mail this Story |
|
Digg this Story |
|
Slashdot this Story |
|
|
|
|
|
|
 |
|
All Zones Application Performance Zone Enterprise-Class Security Zone Enterprise Solutions Zone The File Data Management Zone Grid Computing on Windows Zone Security Management Zone ITIL Best Practices Zone The SAS Zone Storage Virtualization Zone The Data Center Management Zone |
 See your link here
|
 |
||||||||
| ||||||||
| ||||||||
| ||||||||
|
Long Tail Supplier Collaboration - What's In It For You? 
Download this Executive Bulletin (a $49.95 value) for free, compliments of MessageLabs.
Get this white paper now!
Read up on the latest ideas and technologies from companies that sell hardware, software and services.
- Update: Microsoft to appeal $1.3B EU fine
- XP SP3 cripples some PCs with endless reboots
- Windows Vista more secure than XP, says security company
- More top stories
Security Management ZoneSecurity management is the process of developing a comprehensive data protection plan. It takes into account all potential threats, the existing network environment, the future needs of the organization, and lays out a multi-tiered blueprint to integrate the security technology needed to combat these threats. CDW can help keep your network and data secure. Visit the CDW Security Management Zone now See All Zones
|
 Fired up about IT? Join Sharkbait and share your true tales of IT. SharkBait is the place for you to sound off about everything IT – the good, the bad, and the rest of the weird stuff you deal with every day. New baits 
|
Computerworld Technology Briefing: An open-source path to optimal virtualization Looking for a virtualization strategy that offers both the flexibility and reliability to meet the demands of mixed-source environments? Look no further than the fast-emerging open virtualization approach backed by some of the biggest names in enterprise computing. Together they are pointing the way toward higher data center performance without higher costs.Download this briefing
|
 In SecurityThere's plenty of talk about how to behave during a Customs search of your computer and gear, but Jon Espenschied's got tips for securing your data (and privacy) before you reach the border. Click here to read the latest column by Jon Espenschied |
 |
 |
Layered Security Solutions
Although basic network security issues have changed very little over the past decade, the
network security landscape has changed dramatically. Today's IT professionals still have the
primary responsibility of protecting the confidentiality of corporate information, preventing
unauthorized access, and defending the network against attacks. Security experts and analysts agree that a security solution comprised of multiple layers is the best defense against today's increasingly sophisticated attacks.Download this white paper
|
Universal Threat Management - Because Conventional UTM is Not Enough!
This white paper, written by Mark Bouchard of Missing Link Security Services, examines the challenges confronting today's enterprises with respect to managing threats on a network. It also discusses the need for "Universal Threat Management", which is a security solution approach for all physical locations within an enterprise that require threat protection.Download this white paper |
Selecting the Right Threat Management Solution
This short demo will guide you through key considerations for selecting a solution to manage threats on a network. Learn about the popularity of Unified Threat Management (UTM), and how it fits into an overall security solution. Explore critical elements of a network-wide solution for multisite and large network-size deployments and identify the four key features of a threat management solution.View this demo
|
CIO
Computerworld
CSO
DEMO
GamePro
Games.net
IDG Connect
IDG World Expo
Infoworld
The Industry Standard
ITworld
JavaWorld
LinuxWorld
MacUser
Macworld
Network World
PC World
Playlist
Copyright © 2008 Computerworld Inc. All
rights reserved. Reproduction in whole or in part in any form or medium
without express written permission of Computerworld Inc. is prohibited.
Computerworld and Computerworld.com and the respective logos are
trademarks of International Data Group Inc.
|
