amspcs
516 posts since
Oct 18, 2007
3.
Re: Credit card data Aug 7, 2008 3:29 PM
Yes, usually the 'merchant' will eat the loss. When the real cardholder (the victim of the scam in which someone else fraudulently used his/her card) sees the bill, he'll dispute it with his card issuer, who will contact the card acquirerer (the V/MC entity representing the merchant) and lodge a dispute. When and if it is determined that the transaction was fraudulent, the merchant will receive a chargeback--i.e. the amount of the transaction will be debited from the merchant account to which it was credited when the charge went thorugh. If the merchant can't handle the chargeback, then the acquirer processor or bank will 'eat' it...this is why underwriting requirements and credit checks are all part of the application process for all merchants applying for merchant status (the ability to accept CC's for payment).
Yes, this is tough on the merchant. But....really big but....the merchant DOES bear the ultimatel responsibility of making sure the person who hands over the card is the
only authorized person to do so. This is done through common sense such as looking at the name on the card, verifying signatures, verifiying ID when the cardholder doesn't have a signed card, and so on. This is part of basic merchant training. Unfortunately in my personal and professional life, the truth is that painfully few if any merchants follow these common-sense procedures; 95% of clerks just take the card, swipe it, and hand it back--the signature on the back could be "Mickey Mouse" for all they care. This is where fraud and chargebacks come from.
The payment processing industry does take credit card fraud very seriously. They offer many tools to help combat fraud such as AVS, CCV, Level II and Level II promps and so on. There are rules and regs involving 'truncation' of card data on printed receipts as well as specific directives regarding data storage and retention...much of which unfortunately far too many merchants chose to ignore.
For more info on this subject that every merchant and consumer should be aware of, please refer to our webpage
http://www.MerchantServices-help.com/merchant-glossary.html
There you'll find definitions, explanations and links on the following related issues:
Address Verification (AVS)
Chargebacks
CISP (Cardholder Information Security Program". ) and much more
