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Industry and Legislative Leaders Confer on Fraud Epidemic
According to the U.S. Chamber of Commerce fraud in the United States now accounts for approximately 7 cents on every $100 transacted in the country. The leading villains in this epidemic are credit card fraud and data breaches like the highly publicized events which took place during the last year at the Veterans Administration and at the Boston Globe.
Last week representatives of the U.S. Chamber of Commerce and VISA met to discuss the growing fraud problem. For the past year VISA and its affiliated banks have led the way in enhanced anti-fraud procedures with their "advanced authorization" system. Transactions are analyzed against a forty-factor rating system to detect fraudulent activities while they are actually occurring.
The system also seeks to detect behavioral patterns of consumers and banks to pick up on criminal behavior. The entire process is transparent to the card user and takes only seconds to execute.
U.S. Representative Barney Frank, the ranking Democrat on the House Financial Services Committee, told the group, "We must understand how private sectors work, give appropriate incentives, work to better data security and try to find ways to encourage businesses to encrypt data. Second, if the breach happens at retail level, they must take credit for it."
Visa senior vice president for public policy Mark McCarthy discussed ways in which consumers should work to protect themselves including having a verified signature on the credit card. In addition, if more than four digits of a card appears on a receipt at any restaurant or retailer, that entity should be confronted as they are in violation of federal law.
Franks said he hoped to see legislation pass through Congress that would make the encryption process less expensive so that such security measures could become a national standard of doing business without hurting retail entities financially.
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