System and method for enhanced fraud detection in automated electronic credit card processing

Abstract

A method and system for authorizing an electronic credit card transaction having enhanced measures for detecting fraudulent transactions. A user .[.at a remote terminal attempting to conduct an electronic credit card transaction.]. is prompted to input the user's credit card information, address, and social security number. .[.The information input by the user is retrieved and used for identification purposes..]. Initially, the input credit card information is submitted to an issue of the user's credit card to determine whether the input credit card information is valid. The social security number .[.input by the user.]. is next checked .Iadd.against a separate social security number database .Iaddend.to determine if it corresponds to the user. .[.A database having a stored list of social security numbers is accessed, wherein each of the stored social security numbers includes at least one address stored therewith corresponding to an address of an individual identified by the respective social security number..]. The addresses stored in association with the input social security number are retrieved and compared with the input address to determine if the input address corresponds to any of the retrieved stored addresses. If the input credit card information has been confirmed by the issuer as being valid and the address input by the user matches any of the retrieved address stored in association with the input social security number, the electronic credit card transaction is authorized .[.and allowed to transpire. The social security number database is stored and accessed separately from the issuer's credit card information database to provide an added measure of protection against a person fraudulently gaining access to one of the database, since access to the information in both databases is required to complete the financial transaction..].

Description

BACKGROUND OF THE INVENTION1. Field of the InventionThe present invention relates generally to credit card verification processes, and specifically to an improved automated system and process for detecting and preventing the fraudulent use of credit cards by unauthorized users.2. Description of Related ArtCredit cards have conventionally been used for financial transactions for reasons of public convenience and economy. Typically, a purchaser merely needs to present the credit card to a vendor to complete a transaction, where all information necessary to complete the financial transaction is contained on the credit card. Credit cards inherently possess a certain degree of risk for fraudulent use, since the credit card information necessary for the financial transaction appears on the face of the credit card. Thus, if a credit card is lost or stolen, an unauthorized user of the credit card may complete financial transactions by merely presenting the credit card number to a vendor. In...

AI Technical Summary

Benefits of technology

Another object of the present invention is to provide a more effective system and method for detecting fraud in automated electronic credit card processing.

Yet another object of the present invention is to provide a system and method for enhanced fraud detection in automated electronic credit card processing which reduces the number of fraudulent electronic credit card transaction while minimizing the number of valid credit card transactions incidentally prevented from being performed.

A further object of the present invention is to provide a system and method for enhanced fraud detection in automated electronic credit card processing which minimizes fraudulent use of a credit card by utilizing identifying data that is not readily attainable by a fraudulent user.

Problems solved by technology

Credit cards inherently possess a certain degree of risk for fraudulent use, since the credit card information necessary for the financial transaction appears on the face of the credit card.

Thus, if a credit card is lost or stolen, an unauthorized user of the credit card may complete financial transactions by merely presenting the credit card number to a vendor.

However, such authorization techniques can only be performed when the purchaser is in the presence of the vendor.

Prior authorization techniques for in-person transactions can not be used with electronic credit card transactions, so new security measures are required to prevent fraudulent and unauthorized electronic credit card transactions.

If the addresses do not correlate, then the purchaser is deemed to be an unauthorized user and the credit card transaction is denied.

However, address verification systems of this type are not entirely effective in preventing unauthorized use.

Thus, address verification systems have not been successful in entirely eliminating fraudulent usage of credit cards.

However, ANI blocking is also of limited usefulness, because it correlates a telephone number used on one occasion for a fraudulent credit card transaction as a blocked phone number.

Thus, remotely terminals frequently having a plurality of different users, such as hotel room telephones or pay phones, will be blocked by ANI blocking by one fraudulent use, preventing subsequent valid credit card transactions from being performed from that remote terminal.

While ANI blocking is effective in preventing repeated fraudulent credit card transactions from occurring from the same remote terminal, it also has the detrimental effect of preventing subsequent valid credit card transactions from being performed from the same remote terminal.

Clearly, there is a need for a method for preventing fraudulent electronic credit card transactions which does not also incidentally prevent subsequent valid credit card transactions from being performed.

Images