The risk of allowing unauthorized fraudulent credit card transactionsis reduced if you follow the proper procedures on every credit card transaction.
For more details on how to protect your business from credit card fraud read this TD Canada Trust document.
What is card-not-present fraud?
Card-not-present fraud refers to fraudulent transactions that occur without the use of an actual card. Typically, it occurs in situations where customers provide only a credit card number, such as in online, telephone or mail-order transactions.
Because the card is never presented to you, you have no way of checking its validity using the security features outlined on pages 7–10 of the above documnet.
Card-not-present fraud is the fastest-growing type of fraud in Canada. It is popular with criminals because it allows them to commit fraud without the risks involved in going into a store and attempting to make a purchase with a counterfeit or altered card.
What are Visa and MasterCard doing to help prevent card-not-present fraud?
- To help you protect yourself from card-not-present fraud, Visa has developed the Verified by Visa* Program, the Address Verification Service (AVS) and added the Card Verification Value 2 (CVV2) to all cards.
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MasterCard has developed the SecureCode Program and the Address Verification Service (AVS) and added the Card Verification Code 2 (CVC2) to
all cards.
What are the Verified by Visa and
SecureCode Programs?
Verified by Visa and MasterCard SecureCode® use a password system to add a new level of security to online Visa card and MasterCard card transactions. A cardholder creates a password, which they enter whenever they make a purchase at the website of a merchant who participates in Verified by Visa and SecureCode. This helps ensure that the person making the purchase is the actual cardholder and not
just someone who has the account number of a card.
Your customers are aware of the growth in online credit card fraud, and, when they see that your website participates in Verified by Visa and SecureCode, it can help make them feel secure about purchasing through your website. As well, if you participate in the Verified by Visa or SecureCode programs, you can receive greater protection from fraud-related chargebacks.
What are the Card Verification Value 2 (CVV2)
and Card Verification Code 2 (CVC2)?
CVV2 and CVC2 are credit card security features that help you ensure that the person making an online, telephone or mail-order purchase from you is actually a legitimate cardholder. The CVV2 and CVC2 are three-digit security codes that appear on or to the right of the signature panel on the back of Visa and MasterCard cards. (See the card visuals on pages 8
and 10 for examples of the CVV2 and CVC2.)
How does the CVV2 and CVC2 protect
you against fraud?
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Whenever you take a card-not-present order – online, by phone or by mail – make sure you request this three-digit number. The Visa and MasterCard system
provides a real-time check to ensure that the CVV2 or CVC2 you have been given is the one properly associated with the account number provided by
the customer. - By supplying the CVV2 or CVC2, the customer shows that they are actually in possession of the card. If the customer has only the account number or the account number and expiry date, it may indicate that the transaction is fraudulent.
What is the Address Verification Service
(AVS)?
This service verifies a cardholder’s billing address information and provides a results code to the merchant that is separate from the authorization response code.
As a merchant, you can then decide whether to continue with the transaction based on the results code. Issuers are prohibited from exercising fraud-related chargebacks
for Reason Code 83 (Non-possession of card) when the Issuer is not participating in the AVS program and does not respond to a merchant’s request for verification.