Visa Inc. · NYSE:V
Visa — Fraud Prevention Webinar (October 2014)
22 slides from Visa's conference presentation, Oct 15, 2014
Slide 1: Fraud Prevention Strategies For Merchants
Fraud Prevention Strategies For Merchants Andrew Chen Brand Protection Group – Americas Visa, Inc. 15 October 2014 Visa Public
Slide 2: Disclaimer
Disclaimer The information or recommendations contained herein are provided "AS IS" and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should cons
Slide 3: Agenda
Agenda • Overview ‒ Targeted Industries and Products • Card Present Retailers ‒ Potential Red Flags ‒ What To Do • Card Not Present Retailers (eCommerce, MO/TO and Continuity Merchants) ‒ Potential Red Flags ‒ What To Do 3 | Fraud & Chargeback Prevention Strategies – October 2014 Visa Public
Slide 4: Overview
Overview 4 | Fraud & Chargeback Prevention Strategies – October 2014 Visa Public
Slide 5: Overview
Overview • Visa wants to ensure that acquirers and their merchants are aware of fraud and chargeback issues which have historically appeared during the holiday shopping season – Retailers see a significant increase in holiday sales from October to January – Fraud and chargebacks also increase in Oct
Slide 6: Targeted Industries and Products
Targeted Industries and Products • Key sales channels covered: – Card Present – Card Not Present – eCommerce, MO/TO, and Recurring Payments • Targeted industries / products: ‒ Gift cards ‒ Electronics including phones, tablets, video game systems & software ‒ Jewelry ‒ Air travel tickets ‒ Other fun
Slide 7: Card Present Retailers
Card Present Retailers 7 | Fraud & Chargeback Prevention Strategies – October 2014 Visa Public
Slide 8: Card Present Retailers – Potential Red Flags (1 of 3)
Card Present Retailers – Potential Red Flags (1 of 3) • Customers using a “stack” of cards – Some fraudsters have attempted to use an unusually large number of cards during one trip (“stack” of cards) – In some cases, they’ve re-used hotel access key cards or other “white plastic” to encode the paym
Slide 9: Card Present Retailers – Potential Red Flags (2 of 3)
Card Present Retailers – Potential Red Flags (2 of 3) • Self Service Lane – Many fraudsters have used their counterfeit cards at self-service lanes – They like the reduced interaction with store cashiers and managers – Some investigations have shown that the fraudsters even have copies of retailer’s
Slide 10: Card Present Retailers – Potential Red Flags (3 of 3)
Card Present Retailers – Potential Red Flags (3 of 3) • “I have my bank on the phone” – The fraudster will claim that there’s a block on their account or some other problem with their card issuing bank – They’ll call the “bank” on their phone and hand it to the cashier – The “bank” will provide a bo
Slide 11: Card Present Retailers – What To Do
Card Present Retailers – What To Do • In cases of suspected counterfeit card usage, tell your merchants to use discretion – It’s not worth it to have an altercation in your store • Instruct your merchants to request a Code 10 authorization – Issuers will ask a series of questions which require a Yes
Slide 12: Card Not Present Retailers
Card Not Present Retailers eCommerce, MO/TO, and Continuity Merchants 12 | Fraud & Chargeback Prevention Strategies – October 2014 Visa Public
Slide 13: Card Not Present Retailers – Potential Red Flags (1 of 2)
Card Not Present Retailers – Potential Red Flags (1 of 2) • Transactions from “rare” IP addresses – Some online retailers have received fraudulent transactions from a foreign country thousands of miles away • Shipping and billing addresses don’t match – In some cases, ship to / billing addresses are
Slide 14: Card Not Present Retailers – Potential Red Flags (2 of 2)
Card Not Present Retailers – Potential Red Flags (2 of 2) • Unusual transaction activity from new customers – Very large total spend spread across multiple transactions – In some cases, these transactions occur in a short period of time (couple of days) – “Rush” or “overnight” shipping – Orders made
Slide 15: Card Not Present Retailers – What To Do
Card Not Present Retailers – What To Do • “Know Your Customers” and how they access your website – Use “strong” passwords with your customers (letters, numbers, special characters, upper and lower cases) to prevent account takeovers – Use your relationship data: • Are customer purchases consistent w
Slide 16: Card Not Present Retailers – What To Do
Card Not Present Retailers – What To Do • Do not shut off or lower the settings on your fraud tools – Many merchants who have done this in the past to maximize holiday sales wound up in the fraud / chargeback monitoring programs – Merchants should fine tune the settings on their fraud tools based on
Slide 17: Card Not Present Retailers – What To Do
Card Not Present Retailers – What To Do • Layer your security tools – It’s better to avoid a fraudulent transaction and related chargeback than try to manage it in the back office – Use the right set of tools for your environment and business line – In the United States, Card Verification Value 2 (C
Slide 18: Card Not Present Retailer Chargeback Considerations
Card Not Present Retailer Chargeback Considerations • Will there be product shortages due to increased sales resulting in fulfillment related chargebacks? • Are the refund / return policies clearly disclosed to the consumer and easy to understand? Are they well executed? – Some merchants have had si
Slide 19: eCommerce Retailers – Preventing Chargebacks
eCommerce Retailers – Preventing Chargebacks • Screen out potentially fraudulent transactions – Merchants should review any unusual / suspicious transactions manually – When in doubt, it’s best to contact your customer to confirm the order – It is better to screen out these potentially fraudulent tr
Slide 20: Continuity Merchants – Preventing Chargebacks
Continuity Merchants – Preventing Chargebacks • Memberships / subscriptions are common holiday purchases • Acquirers should review their continuity merchants (e.g. memberships, subscriptions) business practices: – Are there clear and easy to understand terms and conditions in the merchants disclosur
Slide 21: Upcoming Events and Resources
Upcoming Events and Resources Upcoming Webinars – Training tab on www.visa.com/cisp • Strategies to Effectively Manage Data Compromise Events ‒ 12 November 2014, 10 am PST • “BlackPOS” Malware Deconstructed ‒ 10 December 2014, 10 am PST Visa Data Security Website – www.visa.com/cisp • Alerts, Bullet
Slide 22: Questions?
Questions? Visa Confidential