How Companies Prevent Carding Fraud

Alot of companies nowadays especially card issuing companies like Visa, MasterCard and others are implementing various techniques to stay ahead of carders. Some of the more interesting recent changes include requiring more information from the user that is not as easily available to the carder. Some of those measures includes AVS.

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What Is (AVS)?

AVS means Address Verification System, An AVS system compares the billing address supplied at checkout in an online purchase to the address on record with the credit card company. The results are immediately returned to the seller with a full match, address match, ZIP code match, and no match at all. A properly-functioning AVS system can stop no-match transactions if the card is reported lost or stolen. For the address-only or ZIP-only matches, the seller has discretion to accept or not. AVS is currently used in the United States, Canada, and the United Kingdom.

IP Geolocation Check

An IP geolocation system compares the IP location of the user’s computer to the bill address entered on the checkout page. If they don’t match, fraud may be indicated.

There are legitimate reasons, such as travel, for a failure to match up, but these incidents often warrant further investigation.

Card Verification Value (CVV)

A card verification value (CVV) code is a three- or four-digit number on a credit card that adds an extra layer of security for making purchases when the buyer is not physically present. Since it is on the card itself, it verifies that the person making a phone or online purchase actually has a physical copy of the card.

If your card number is stolen, a thief without the CVV will have difficulty using it. The CVV can be stored in the card’s magnetic strip or in the card’s chip. The seller submits the CVV with all other data as part of the transaction authorization request. The issuer can approve, refer, or decline transactions that fail CVV validation, depending on the issuer’s procedures.

Multifactor Authentication (MFA)

Multifactor authentication (MFA) is a security technology that requires more than one method of authentication from independent credentials to verify a user’s login or other transaction. It can use two or more independent information bits, such as a password, authenticator token, or biometric data. Using MFA creates a layered process that makes it more difficult for an unauthorized person to access their target, because the attacker probably won’t hack all of the layers. MFA originally used only two factors, but more factors are no longer uncommon.

CAPTCHA

CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart) is a security measure of the challenge-response authentication type. It protects users from password decryption by asking the user to complete a test that proves the test taker is human and not a computer attempting to break into the account.

CAPTCHA typically uses a random series of images in a block and requires the user to identify them. These are anomaly-spotting systems (e.g. click on the squares with motorcycles). The challenges are designed to be easy for humans, but less so for computers.

Velocity Checks

Velocity checks look at the number of transactions attempted by the same card or site visitor within a given number of seconds or minutes of one another. Typically, users do not make multiple payments in quick succession, especially payments so rapid as to be beyond the capacity of a human being.

Velocity can be monitored by dollar amount, user IP address, billing address, Bank Identification Number (BIN), and device.