New Anti-Fraud Measure
Published: Saturday, October 22, 2005 Online-Casinos.com
NEW ANTI-FRAUD MEASURE
Metacharge helps keep the under-aged out, too
A fast but expensive new ID verification and status process is now available to the online gambling industry - but it's pricey.
Out-Law.com reports that by adding less than two seconds to an e-commerce process, website operators can now check the age, identity and vital status of customers against the UK Electoral Roll, BT directory enquiries, a credit reference database and a mortality database.
The new service to reduce card fraud and assist compliance with legal age restrictions comes from payment service provider Metacharge. Working with 192.com it integrates the automated age and identity checking service with payment processing.
At the standard rate of GBP1.50 per query this is not a cheap service, but London-based Metacharge points out that fraudulent card usage is costing over GBP1 million a day in the UK alone.
Managing Director Scott Law says that online gaming "is a magnet for fraud". He said that the fastest growing form of identity theft is not phishing; it is taking the identities of dead people and using them to get credit. Thus a check against a mortality database tells an offshore internet casino if its latest poker player is in fact a corpse.
"Anyone with age-restricted goods or services or high value items, like consumer electronics, can benefit," said Law.
Out-Law points out that it is currently legal for British residents to bet or gamble online from home. About 800,000 adults do so every month, according to the Department of Culture Media and Sport. It is also legal to run a site in the UK that takes bets.
However, it is not at present lawful for a company to run an online casino if its equipment and payment processing are in Britain because the Gaming Act of 1968 requires punters to be present in person where the gaming is taking place. This is set to change, and the law will relax when provisions of the Gambling Act 2005 come into force around September 2007.
The new service to reduce card fraud and assist compliance with legal age restrictions comes from payment service provider Metacharge. Working with 192.com it integrates the automated age and identity checking service with payment processing.
At the standard rate of GBP1.50 per query this is not a cheap service, but London-based Metacharge points out that fraudulent card usage is costing over GBP1 million a day in the UK alone.
Managing Director Scott Law says that online gaming "is a magnet for fraud". He said that the fastest growing form of identity theft is not phishing; it is taking the identities of dead people and using them to get credit. Thus a check against a mortality database tells an offshore internet casino if its latest poker player is in fact a corpse.
"Anyone with age-restricted goods or services or high value items, like consumer electronics, can benefit," said Law.
Out-Law points out that it is currently legal for British residents to bet or gamble online from home. About 800,000 adults do so every month, according to the Department of Culture Media and Sport. It is also legal to run a site in the UK that takes bets.
However, it is not at present lawful for a company to run an online casino if its equipment and payment processing are in Britain because the Gaming Act of 1968 requires punters to be present in person where the gaming is taking place. This is set to change, and the law will relax when provisions of the Gambling Act 2005 come into force around September 2007.
The Act also requires that systems be put in place to ensure that under 18s are excluded.
Using the Metacharge Verify Your Customer (VYC) system, merchants can automatically authorise or decline transactions based on the results. They can also set the system to hold a transaction, triggering a manual check. The customer might then be asked to fax a copy of his driving licence and a utility bill.
About two or three customers in 10 will trigger the need for a manual check. But Out-Law claims that before tools like this, all tests were manual, adding significantly higher running costs to gaming operations. The VYC system runs a geographic IP address lookup, and the accuracy of such checks has improved greatly in recent years. "It used to be that all AOL accounts looked the same, but not any more," the Out-Law report reveals.
The first six digits of any credit card identify the issuing bank and country. Metacharge's service reports this information to the merchant - together with the country and city submitted by the cardholder and the distance in miles, if any, from his IP address to his street address.
The system also reports the number of chargebacks received from the card in use and from the customer's IP address.
Using the Metacharge Verify Your Customer (VYC) system, merchants can automatically authorise or decline transactions based on the results. They can also set the system to hold a transaction, triggering a manual check. The customer might then be asked to fax a copy of his driving licence and a utility bill.
About two or three customers in 10 will trigger the need for a manual check. But Out-Law claims that before tools like this, all tests were manual, adding significantly higher running costs to gaming operations. The VYC system runs a geographic IP address lookup, and the accuracy of such checks has improved greatly in recent years. "It used to be that all AOL accounts looked the same, but not any more," the Out-Law report reveals.
The first six digits of any credit card identify the issuing bank and country. Metacharge's service reports this information to the merchant - together with the country and city submitted by the cardholder and the distance in miles, if any, from his IP address to his street address.
The system also reports the number of chargebacks received from the card in use and from the customer's IP address.
