VeriSign announces anti-fraud service

VeriSign is launching a service to thwart online fraud with support voiced from at least one major credit card company.

The company on Wednesday unveiled VeriSign Fraud Protection Services, a subscription-based service that helps merchants spot fraudulent online transactions.

The heart of the service is a new fraud detection engine, developed by VeriSign, that uses information derived from more than $20 billion in online transactions managed by VeriSign to model different kinds of online fraud behavior, according to Trevor Healy, vice president of payment services at VeriSign.

The service concentrates on spotting three common types of online fraud activity: product theft, identity fraud and cash fraud, Healy said.

Product theft refers to the use of stolen credit card information to make unauthorized product purchases. Identity fraud refers to the theft of individuals’ personal information, including financial information, from online transaction systems. Cash fraud refers to the use of online transaction systems to issue unauthorized refunds to a credit card, according to Healy.

For merchants that sign up for the service, VeriSign monitors online transactions for suspicious buying behavior, unusual transaction volume or transactions linked to IP addresses, e-mail addresses or credit card numbers associated with fraud.

Details of transactions are also vetted. For example, for customers seeking a refund to their card for a purchase, VeriSign confirms whether the original purchase transaction actually occurred, Healy said.

Transactions that are deemed to be fraudulent are halted mid-stream, before money has changed hands or product has been shipped.

The merchant is then notified by VeriSign of the possible fraud activity by phone or e-mail. If the merchant can verify the transaction with the customer, the transaction is allowed to go through, Healy said.

The service is designed for a wide range of online merchants, from “Mom and Pop” operations up to large online retailers.

“Criminals don’t discriminate as to who to commit crimes against, so we try to cater to the complete spectrum (of merchants),” he said.

Small operations can expect to pay around $19.95 per month to use the service as well as a $.05 fee per transaction.

Pricing and monitoring services for larger operations also includes a per transaction fee, but varies to suit the type of business and volume of transactions handled by the merchant, Healy said.

While the data rules used to spot fraud are similar for large and small customers, larger vendors receive customized monitoring just for their traffic and VeriSign personnel dedicated to monitoring traffic on their site, he said.

While the new service is geared towards merchants, it works alongside other online transaction authentication programs like MasterCard International’s SecureCode and Visa International’s Verified by Visa program, according to Healy.

Credit card companies have been supportive of the initiative, he said. VeriSign’s announcement included a statement of support from an executive at MasterCard.

Initiatives like the new VeriSign service and other buyer authentication programs all get at the generic industry problem of fraud, which is widely accepted as a good thing, Healy said.

VeriSign’s Fraud Protection Services is already in use by a number of online merchants and was made generally available to the public on Wednesday.

Interested merchants should contact VeriSign sales for information on subscribing to the service, Healy said.