Legislation to force banks to verify name and address?

[dickbaker]

After having been a victim of credit card fraud a couple of times in the last two or three years, I now do name and address verifications on all credit card transactions. I'll do the automated ones that Visa supplies, but only for amounts under $200, and only if I the name and address supplied matches a search on one of the online phone directories.

For Mastercard there's no choice but to call the financial institution. Amex and Discover are great, each having a fully automated system that allows you to check name, address, city, zip and phone.

For amounts approaching or going over $1000 I call the credit card company and ask them to contact the card holder to verify that he or she authorizes the purchase. I want that verification in the customer's file just in case.

There are a lot of banks and credit card companies that refuse to do verifications, though, even if I offer to get the customer on the line (something I hate doing anyway). The banks don't care because they know it's the merchant who eats the cost of fraud.

I've really had it with those that won't do verifications, and I'm wondering if it's feasible to get online and brick and mortar merchants organized to lobby for a change in credit laws. I think the banks and credit card companies that don't do verifications should have to eat the costs of fraud, not the merchants who ask for verifications.

I realize the banks and credit card companies have their vast finances to influence members of congress, but there's strength in numbers, as the NRA and other groups have shown.

So, what do you think? Is it possible to get merchants together for such a cause?

[MrHard]

Mastercard/Visa can AVS on address and zip. Gateway issue? or are you using PayPal?

You can check phone easily on your own as well as ip, but irrelevant as far as a chargeback is concerned.

Btw, for customers purchasing over $1k if you have to do a conference call for any reason you are going to be losing more orders then if you just put it through.

[dickbaker]

The automated systems are fine for very low-priced items, but I like to get a human on the phone for anything over $200.

Btw, for customers purchasing over $1k if you have to do a conference call for any reason you are going to be losing more orders then if you just put it through.

I either get the customer on the line with the credit card company, or have the card company call the card holder. Either way, I want it in the customer's file that he/she authorized the purchase.

A friend of mine has an online store, and just uses the CVC codes and his terminal. He does about $100,000 a month in gross sales, but loses $15,000 a month in chargebacks.

As I said, I've been burned a couple of times, but not since I've implemented the rules I mentioned for purchases.

I still think that a bank that won't do verifications should be the one taking the risk, not the merchant.

[piatkow]

I still think that a bank that won't do verifications should be the one taking the risk, not the merchant.

The bank should take the risk if VBF/MSC is used. If the merchant doesn't want to use it then they should take the risk.

The only fraudulent transaction to ever hit my card was from a US merchant who didn't use MSC or chip and pin (I never discovered if it was a cloned card physically presented or a CNP)

[dickbaker]

What is VBF/MSC?

[MrHard]

We routinely take online orders in excess of $1k, I can't remember the last time any were fraud. Maybe once or twice in the past 5 years or so, even then it was a customer gripe and not true fraud. Sight unseen orders with just AVS, even flexible most of the time on matches.

I'm surprised the merchant account has not been pulled with that chargeback ratio.

Something else must be going on. Any patterns to the chargebacks? When you say fraud do you mean stolen card numbers, or dissatisfied customers? What's the chargeback reason?