New Internet coalition brings merchants and payment industry together to fight fraud

[September 27th 2000]

A number of leading e-commerce merchants, including buy.com, Expedia.com, Starwood Hotels and Ventro Corporation, have announced that they have partnered with American Express, card processors, Paymentech and First Data Corp., and ClearCommerce, a provider of transaction solutions, to form the Worldwide E-Commerce Fraud Prevention Network, an industry coalition aimed at reducing Internet-based fraud.

American Express conceived the idea for the Fraud Prevention Network in early 2000 and was quickly joined by other industry leaders, all of whom have made security a top priority and are committed to making the World Wide Web a safer place for businesses and consumers. One of the group's key strategies will be to share fraud prevention information and best practices with merchants of all sizes in order to improve Web security and decrease the costs associated with fraud. Merchants often bear the cost of fraud when stolen cards are used to purchase goods at their site.

"The Worldwide E-Commerce Fraud Prevention Network has the potential to do what no other fraud prevention group is doing: prioritise merchant concerns and identify specific solutions for resolving those issues," said Steve Squeri, President, Establishment Services Canada and the United States. "American Express has a long history of partnering with its merchants to help them grow their businesses. Forming this Network is yet another example of these efforts," added Squeri.

By design, the Founding Members of the Fraud Prevention Network represent diverse sectors of e-commerce and bring a wide variety of fraud prevention expertise to the organization. For example, buy.com and Expedia are consumer-focused businesses. Ventro is a business-to-business enterprise, and ClearCommerce represents the viewpoint of thousands of brick and mortar and dot-com e-tailors. First Data and Paymentech are experts in credit card processing. American Express, the Network's original founder, understands both the perspective of its Cardmembers and its merchant partners and has a variety of sophisticated fraud tracking tools in place to help monitor and prevent fraud from occurring.

The Worldwide E-Commerce Fraud Prevention Network will conduct a number of activities to promote increased security:

• The Network plans to hold fraud prevention workshops and may host a fraud prevention summit next year.

• The Network has also hired Gartner Group, Inc. to conduct an independent study in which they will research and evaluate current and future fraud prevention solutions. The results of this study will be available later this year and shared with all Network members.

• Gartner Group, Inc will also provide Network members with quarterly white papers on specific fraud prevention topics.

• The Fraud Prevention Network will have its own Web site, located at www.merchantfraudsquad.com, that will serve as a clearinghouse for information about fraud prevention best practices, software vendors, security seminars, law enforcement organizations and current fraud prevention trends. To help promote consumer confidence in e-commerce, the Web site will also include tips for shopping safely online.

• The Network also expects to partner with consumer groups, law enforcement, better business bureaus and other fraud prevention groups to provide information and encourage best practices.

To support the Network's initiatives, American Express will fund the Fraud Prevention Network's activities during its first year. The other Founding Members will provide these resources moving forward.

This funding is key. It will allow the Network to offer free charter membership to any organization or business interested in fighting Internet fraud. However, in order to help improve overall security on the Internet, the Network asks that all members agree to abide by good fraud prevention and security practices, including:

• Ensuring that all credit card information on their site is encrypted and/or password protected.
• Maintaining data transmission in a secure environment with limited authorized access.
• Keeping all security software up-to-date and firewalls properly configured.
• Contacting law enforcement in any situation where crime is suspected.

Merchants can learn more about these guidelines and sign up to join the Network by visiting www.merchantfraudsquad.com.

Links
Worldwide E-Commerce Fraud Prevention Network		http://www.merchantfraudsquad.com