FRAUD PROTECTION

---

At Fidelity we offer many solutions to help you protect against fraud. These include Authorize.net and Verified By Visa

Authorize.net

The Fight Against Online Transaction Fraud

In the faceless world of the Internet, online transaction fraud is one of the greatest challenges for merchants. According to the results of the 10th annual CyberSource Online Fraud Report, U.S. merchants lost an estimated $4 billion to fraud in 2008. Advanced solutions are needed to protect merchants from this constantly evolving threat. The
Authorize.Net Advanced Fraud Detection Suite™ (AFDS) arms you with advanced filters and tools, providing a customizable solution to combat today’s most common types of fraud.

All Merchants Are Potential Targets

Regardless of size, transaction volume or Internet expertise, all e-commerce merchants are susceptible to falling prey to any of the various types of online transaction fraud. Hackers and fraudsters are becoming more sophisticated and skillful at manipulating Internet protocols, Web languages and infrastructures to discover any weakness they can exploit. Thousands of online merchants experience suspicious transaction activity and other types of account abuse each day—and it can happen to you.

Standard Verification Tools Are Not Enough

Standard verification tools developed to assist merchants with screening transactions, such as the Address Verification System (AVS) and Card Code Verification (CCV), though essential, are limited as to the level of protection they can provide. Fraudsters have learned how to interpret AVS and CCV responses and are not usually deterred by the use of these tools. As a result, using these verification tools exclusively for protection against fraud is insufficient. Merchants now need to look to additional, more advanced solutions designed to fight fraud—such as the Advanced Fraud Detection Suite.

Common Types of Fraud

Knowing what you’re up against is the key to a strategic defense. Online merchants most often face two types of transaction fraud.

Verification Fraud

The most common type of fraud is verification fraud. Fraudsters can easily obtain or generate potentially legitimate credit card numbers. By submitting orders using a merchant’s payment form, they can determine whether that information is valid. At this point, they are not seeking financial gain, only information. But for merchants who
suddenly experience thousands of invalid transactions, the repercussions can be costly.

Settlement Fraud

Once fraudsters have confirmed the validity of a credit card, they can then use it to purchase goods from a merchant. Fraudsters will usually attempt to get a merchant to ship large amounts of a product to a location different from the billing address of the cardholder. Their motive is to steal as much as they can as quickly as possible. By the
time the chargebacks come rolling in, merchants are left holding the bag.

Combat Online Fraud Using AFDS

By supplementing standard payment gateway features such as AVS and CCV, AFDS helps create an umbrella of protection for your business. With customizable filters and tools, AFDS provides you with a greater degree of control over your incoming transactions, and can potentially prevent costly authorization and chargeback fees, as well as the inventory loss that often results from fraudulent transactions. Benefits of AFDS include:

- Customizable Filters – Configure AFDS’s filters based on your business’s processing trends.
- Pending Review – Prevent per-transaction fees by holding, reviewing and declining transactions prior to authorization.
- Advanced IP Address Tools – Allow or block transactions from specific IP addresses, regions and countries.
- Suspicious Transaction Search – Use unique filter-specific criteria to search for transactions that have triggered a filter.
- Suspicious Transaction Reports – Intuitive reporting allows you to research transactions that have triggered one or more filters.
- Control Response to Customers – Choose from standard customer responses or create your own response for transactions that have tripped one or more filters.
- E-mail Notification – Receive real-time e-mail notification each time a suspicious transaction triggers one or more filters.

Verified By Visa

How merchants are protected: Verified by Visa can provide merchants with significant savings in fraud-related costs. Merchants who use Verified by Visa are protected from fraud-related chargebacks on all personal Visa cards - credit or debit, domestic, or international — whether or not the issuer or cardholder is participating in Verified by Visa, with limited exceptions.

Preventing online fraud is a key consumer concern
Security and protection against fraud are especially important to online consumers. In fact, payment card security is cited as an important reason why consumers do not make purchases online*.

By participating in Verified by Visa, you’ll give your customers reassurance they’re safe when they shop in your site. Moreover, more than 70 percent of consumers surveyed** indicated that they would be more likely to make purchases at Web sites that support Verified by Visa.

A new level of confidence when they shop online: At checkout, software installed on the merchant server recognizes the Visa card and prompts a password entry field to appear. Consumers enter their Verified by Visa password, the password is verified and the transaction completes.

No special software or digital wallet required: Unlike other services that promise online security, with Verified by Visa, shoppers don’t have to load special software or open a digital wallet. A seamless customer shopping experience is maintained.

For more information visit http://usa.visa.com/merchants/risk_management/vbv.html

*The UCLA Internet Report, "Survey the Digital Future. Year Three," February 2003.

**Visa Tracking Study, Wave 6, September, 2005