Chargeback Defense Primer

Wikipedia calls a chargeback "... the return of funds to a consumer, forcibly initiated by the consumer's issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account or line of credit." Chargeback fraud costs online businesses billions of dollars annually. There are four primary defenses against chargebacks.

First, you should be using address verification as a primary way to prevent credit card fraud. Secondly, you can fight the chargeback, and in some cases the banks may decide in your favor. Some of the services that help fight chargebacks help you by interceding with your bank. The third way businesses fight chargebacks is by using a "black list." This is a database of past chargebacks. Building a black list has proven useful in the fight against chargebacks but doesn't solve the problem. Even when black lists are shared in comprehensive chargeback databases the entirety of the problem is not solved. People who commit credit card fraud through the chargeback system change cards and information so regularly that the lists quickly become outdated. The lists that claim to have millions of records are simply filled with old, and useless information. Data in these systems older than six months is simply useless. Beware of companies that tout "HUGE" databases. This is simply a marketing ruse. The fourth and most effective way to elminate chargebacks is by having a computer program examine the transaction and make a decision about the likelihood that it will result in a chargeback. This is a little like having an insurance underwriter examine a policy before writing it. There are two kinds of rule-based program systems. One uses artificial intelligence (AI) using a predictive mathematical model, and the other is a business rule-based system. While mathematical models are interesting, fraud changes so quickly that they rapidly become useless in discovering high-risk transactions. The most effective way to reduce chargebacks is to have a forensic expert examine your chargeback data on a regular basis and create a set of business rules unique to your business.

Risk Score is a Web-based business rule system that examines your credit card transactions and provides a score. These rules are created by the top forensic experts in the World. In addition to the business rule system, Risk Score also utilizes a dynamic black list database. We don't claim to have millions and millions of mostly useless records. We maintain the most up-to-date chargeback data to support our rule-based system. Risk Score was created by forensic, information security and e-commerce experts. This team works ceasely in the fight against fraudulent chargebacks. Also, e-commerce programmers can work with your business to integrate Risk Score into your decision support system. When you submit a transaction to Risk Score you instantly recieve a score on that transaction. The simple system will either allow or deny the transaction based on its score. More complex systems may re-route the transaction to a manager for human review, or programatically require the customer to enter additional information, or prove their identity.

Risk Score is RISK FREE. First, we let you try it free for thirty days. See how it works in YOUR business. There is no better way to see how well it works. Second, we refund the transaction fee for those that result in a chargeback. We don't want you to pay when we're wrong. It also helps us to constantly improve the Risk Score system.

"Let Risk Score worry about the fraud and chargeback risk while you do what your company was designed to do."

Fighting creditcard fraud is a full-time business. Let forensic experts gather the data your company needs to make the best e-commerce transaction decisions and provide it to you as a simple numeric score. As fraudsters create smarter ways to defeat your e-commerce system, anti-fraud experts will work to defeat their schemes to take your profits and products.

Risk Score is

• Powerful
• Dynamic
• Easy to Use
• Affordable

Don't mistake the simplicity for lack of power. Massive amounts of data are expertly correlated to create this unique scoring system.