LAFAYETTE, IN, January 16, 2014 /24-7PressRelease/ -- Two veterans of the payment and technology industry have been granted a United States patent for a new methodology capable of flagging identity thieves the first time they attempt to use a stolen credit or debit card. The system described in patent number 8,621,641 also blocks attempts to open new credit using someone else's name and social security number. In the wake of the massive data hacking that affected millions of consumers over the holidays, this new, proactive process proves timely.
The realization that spurred this new fraud blocking system invented by Michael Carow and Vicki James is that sensitive customer data resides everywhere today, from retailers to cell phone providers to utility companies to universities, and consumers are completely dependent upon the protection practices of those organizations. "Try as they may, external companies cannot be relied upon to keep our personal information safe," states James. "While we consumers may not be able to control hacking and data breaches, with this invention, we now have the power to render stolen information useless to data thieves."
This new proactive approach is capable of alerting consumers via a smart phone or other communication device any time their credit bureau information is requested or when a debit or credit purchase is attempted. Employing the dual authentication method of the patent, consumers have the power to confirm or deny access to their credit report or a charge using their card. This ensures that any potential damage from identity or card fraud is stopped instantly.
Current fraud detection methods fall short because they rely on software to detect a suspicious pattern of card use on an after-the-fact, reactive basis, often resulting in substantial losses before a breached account is shut down or, in the case of false alerts, resulting in an inconvenient shutting down of a customer's credit cards merely because of changes in travel or buying habits. The newly patented processes empower consumers to control access to their personal information or use of their credit and debit cards to prevent identity fraud before it occurs.
"It is ironic how people in 24/7 communications mode aren't automatically alerted every time their bank account or credit card is charged, or their credit report is accessed," commented Tony Escobar, executive vice president of AmiCOUR IP Group, the company retained by James to help implement the technology. "This system is capable of alerting the customer for every transaction involving his or her accounts or identity, or it can trigger an alert based on defined boundaries, for example, sending alerts for each transaction over $100."
"This process could prevent the kind of lawsuits facing Target and other retailers who had their systems hacked during the holidays," added Scott Bechtel, AmiCOUR's CEO. "Carow and James developed a novel way to bring the real account holder into every transaction, regardless of whether that account holder is physically present. This virtual presence element is the key to stopping identity fraud."
James added, "Another huge advantage is transparency in checkout lanes because authentication does not delay credit card approval or slow down the line." She explained, "The first transaction may go through automatically before the card owner has a chance to approve or deny it. If the purchase was not made by the real owner, then the transaction may be denied after-the-fact but before a second fraudulent transaction can take place." Given that charges post but clear later, the process also may offer credit card issuers more power to reverse fraudulent transactions before shipment or delivery. Examples include online retailing, travel, or entertainment event ticket sales, where fraud has become a major problem. These online sellers or their banks can mandate authentication and institute a delivery waiting period until the card owner authenticates the purchase. This would eliminate fraud for one of the weakest areas in the payment system without disrupting the efficiency of everyday purchases."
Escobar's company is initiating licensing discussions with interested industry leaders. When asked who might be first to deploy the new protection process, Escobar replied, "One approach would be as a premium service offered by card issuers individually or as a component of a full service payment product. The technology would eliminate the worries and inconvenience caused by existing fraud prevention algorithms imposed on card holders by some issuers. An alternative approach would be for a consumer identity protection provider to offer the service to its customers as a pro-active approach to identity protection. In any case, a more bullet-proof service would certainly ease the worries of retail customers victimized by last month's card hacking attacks."
With annual fraud losses now in the tens of billions of dollars, plus the headaches consumers face fixing the damage from identity fraud, the potential value of a new solution may be one point consumers, banks, and retailers can all agree on. Escobar added, "Any licensor successfully using Vicki and Mike's patented process to help its customers avoid the hassle of stolen identity or even a hacked card and put an end to their losses at the same time is going to make a lot of money."
About AmiCOUR IP Group, LLC: AmiCOUR IP Group a leading intellectual property consulting company providing IP asset management and consulting services, licensing and brokerage assistance, royalty auditing, and assistance enforcing compliance with patent rights. Contacts: J. Scott Bechtel, Managing Partner and CEO, Voice: 312-725-3728
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