The card does not display transactions ( CNP , MO/TO , Mail Order/Phone Order , MOTOEC ) is a payment card transaction performed in which the cardholder does not or can not physically show the card for a visual inspection of the merchant at the time the order is given and the payment is made. It is most commonly used for payments made via the Internet, but also mail-order transactions by mail or fax, or by phone.
Cards not serving transactions are the main routes for credit card fraud, because it's hard for merchants to verify that the actual cardholder actually authorized the purchase.
If a CNP fraudulent transaction is reported, the bank acquiring the merchant account owner who receives money from fraudulent transactions must make restitution; whereas with swiped transactions (current cards), the card issuer is responsible for the restitution. Due to the greater risk, some card issuers charge higher transaction costs to merchants who routinely handle cards not serving transactions.
The card security code system (generally CVV2) has been set up to reduce the incidence of credit card fraud arising from CNP.
Video Card not present transaction
Mail-order fraud
If the card is not physically present when the customer makes a purchase, the merchant must rely on the cardholder, or the person claiming so, presents the card information indirectly, either by mail, telephone or via the Internet.
Shipping companies can guarantee the delivery of goods to a location, but they usually do not need to check the identification and they are usually not involved in processing payment for merchandise. The general precaution for merchants is to allow shipments only to addresses approved by cardholders, and merchant banking systems offer a simple method to verify this information. Prior to this and similar countermeasures were introduced, mail order carding was rampant since 1992. A carder will get credit card information for local residents and then intercept unauthorized shipping purchased at shipping address, often by stalking the foyer residence.
Small transactions generally undergo fewer checks, and are less likely to be investigated by card issuers or merchants. CNP traders should take extra precautionary measures against exposure to fraud and related losses, and they pay a higher rate for the privilege of receiving cards. Fraudsters bet on the fact that many fraud prevention features are not used for small transactions.
The merchant association has developed several preventive measures, such as single use card numbers, but this has not been much successful. Customers expect to be able to use their credit card without interruption, and have little incentive to pursue additional security because the law limits the customer's liability in case of fraud. Traders can apply these preventative measures but risk losing business if customers choose not to use these steps.
Maps Card not present transaction
Fraud
The United States Federal Trade Commission discloses operations that run from 2006 to 2010 that capture more than $ 10 million in fraud on credit and debit cards. The perpetrators use more than 100 merchant accounts they have created for billing.
Each merchant account is attached to the Employer Identification Number of a real trader with a similar sounding name.
Each merchant account is tied to an 800 number from CallMe800. Each account is also associated with the website they create. They also rented the physical address of the company that rented the virtual office, as before Regus, for each merchant account. These virtual office firms, who do not know and are not involved in fraud, will forward emails received at virtual offices to Earth Class Mail, a digital mail service that scans email from the physical address of a merchant account and passes it as a PDF to an email account that has been created by the swindlers. The fraudsters also make sure that when they check their online merchant account, that they use an IP address located near the billing address in order not to arouse suspicion.
The $ 9 fee is processed on about a million credit cards over a four-year period. Each card is billed once. Credit card companies are only investigating if they cost more than $ 10, because they cost so much to run an investigation. Then the money was transferred to a bank account in Lithuania, Estonia, Latvia, Bulgaria, Cyprus and Kyrgyzstan where the money could not be traced or recovered. The perpetrators are experimenting with 20 cents and that raises more suspicion than the $ 9 fee. Only about 10 percent of the fraudulent charges ever reported or opposed by the cardholder are billed.
References
Source of the article : Wikipedia
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