VoIP technology has gone a long way since it was introduced in 1995 by Vocaltec. During this time, VoIP technology rapidly developed and started to serve not only the voice communication, for which it was originally designated, but also different non-voice business and personal needs. In this article I would like to describe you one possible use of VoIP technology in the context of fraud prevention.

Online fraud is a common headache for a vast majority of companies accepting credit/debit cards payments online. Unfortunately, Visa/MC, banks, Internet Payment Gateways and other companies that provide credit/debit card processing and acquiring services tend to impose this problem on the end user (e-shop, hosting company etc). End users of card processing and acquiring services (hereafter "Host") have to either create their own fraud prevention system or buy one of a fraud prevention systems from a third party.

Let's go into fraud prevention a little deeper. Today, most fraud prevention systems use several methods of determining a fraudulent transaction such as Address Verification System (AVS) which compares the address entered by Hostmaster's client against card issuer's records. Unfortunately, AVS works in a very limited number of countries and therefore we cannot say that AVS is the perfect tool for combating card fraud. Also, most card details that fraudsters can obtain today include the full name and address of the card holder therefore it makes AVS is of little help in combating card fraud.

Another method of determining a fraudulent transaction is the CVV2 code. CVV2 code is a three- or four-digit code printed on the back of the credit/debit card and is not used in "card present" transactions making it impossible to obtain this code "offline" (e.g. by collecting card slips thrown away by careless card holders). The CVV2 code was of big help in combating card fraud several years ago. Unfortunately it isn't anymore, as today getting full credit/debit card details including CVV2 code is almost as easy as the getting details without it. This is because today most credit/debit card details are obtained for online fraud through so-called "phishing" and include the CVV2 code, full name of the card holder, full address etc. Modern fraud prevention systems include some other methods of determining fraudulent transactions based on the geographical IP location, web browser settings, cookies and so on. Unfortunately, today most fraudsters know these methods and know how to effectively overcome them.

Until recently, the cost of VoIP calls was quite high thus making it unreasonable to use VoIP for anything but voice communication. Today, when VoIP call to almost any country in the world costs around one cent and prices continue to fall, the use of VoIP technology in fraud prevention systems proves to be very efficient and effective.

Let me explain how VoIP technology can help in combating card fraud. The main problem in combating card fraud is in verifying whether the card details entered by Host's client are in fact the client's details. The implementing a simple script provided by a company specializing in offering such services (e.g. ProveOut.com) in the shopping cart of almost any online shop, allows a Host to initiate a VoIP call to host's client within payment process. The implemented script generates a random number and shows it to the host's client and instantly initiates a VoIP call to the client's phone number that he or she entered while going through the payment process. When connected, the client is prompted to enter the number that he or she sees on display using their telephone keypad. By entering the correct number, the client proves that the phone number provided in the payment process is in fact his or her phone number. This simple routine takes no more than one minute and allows the host to make sure that the details entered by host's client are correct, therefore making it impossible for card fraudsters to complete the payment process.

Of course, some may say that fraudsters can get hold of an anonymous phone number (cell phone, SkypeIN etc.) and use it in host's payment process. Here we must remember that the city code of this phone number must correspond with the client's address and with the client's IP geographical location. Also, client's telephone number can be checked against a special telephone database that identifies the phone number type (cell number, redirection service number such as SkypeIn etc.). Depending on host's preferences such phone numbers can be declined or marked as potentially fraudulent.

The use of VoIP technologies such as telephone authorization described above can be of great help for Hosts as it helps to identify host's clients and therefore helps to minimize card fraud.

At Proveout.com we have created a range of services and products suitable for almost any online business that faces card fraud. By combining VoIP technology, our knowledge and a creative approach we can offer online businesses a solution against card fraud that actually works.

Being a new company offering a new service, we understand that many online businesses have to get familiar with new technology and our services therefore we are proud to offer a free telephone authorization service that will allow you to taste.

We do believe that our ideas, our expertise and our knowledge will help the internet community to effectively combat card fraud. That is why we have "We help to prevent fraud" as our motto.