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Method and System for Detecting Possible Fraud in a Transaction

IP.com Disclosure Number: IPCOM000244805D
Publication Date: 2016-Jan-18

Publishing Venue

The IP.com Prior Art Database

Abstract

A system and method for detecting possible fraud in a transaction is disclosed. A server receives a transaction request which includes credentials of a user. The server then retrieves information associated with the credentials and identifies a first and at least one additional location-enabled possession of the user. The server then transmits a location information request to the identified possessions requesting location information and, upon receiving the location information, compares the location information. If the location information indicates that the first and at least one additional possession are in a similar location and/or an expected location, the server increases a confidence indicator. If, on the other hand, the location information indicates that the first and at least one additional possession are not in a similar location and/or not in an expected location for the transaction, then the server decreases the confidence indicator.

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TITLE

Method and System for Detecting Possible Fraud in a Transaction

PROBLEM DESCRIPTION

Electronic transaction fraud, particularly payment card fraud, is an ever increasing problem for financial institutions. The introduction of EMV smart cards, often referred to as CHIP-and-PIN

cards, was aimed at eliminating, at least to some extent, such crime. EMV cards are cards which include a computer chip embedded in the smartcard and which require a user to enter a personal identification number (PIN) to approve a transaction. Although the introduction of EMV cards has caused fraud in certain context to decline, it is still a prominent problem in other cases.

Cases where fraud still plays a prominent role are card-not-present transactions, counterfeit fraud cases, automated teller machine (ATM) fraud cases as well as cases where the card is lost or stolen. Card-not-present refers to transactions which are conducted over the Internet, phone or mail and the cardholder is not present at the time of the transaction, thus often only

becoming aware of the fraud once the transaction has been committed. Counterfeit fraud cases are cases where the magnetic strip details of a card are fraudulently acquired and one or more counterfeit cards, which are fake replicas of the card, are created. ATM fraud cases are cases where the data stored on a card's magnetic stripe are copied and the PIN is recorded while the cardholder uses the ATM. In cases where a card is lost or stolen fraudulent transactions are

simply committed using the card.

Although EMV cards have caused electronic transaction fraud to decline and counterfeit fraud cases and lost or stolen card fraud cases are predominantly committed in areas where the EMV card technology has not fully been introduced, electronic transaction fraud remains a problem.

In addition, where the card has been lost or stolen and fraudulent transactions are being committed therewith, the fraud may often only be detected once the cardholder becomes aware of the fraudulent transaction.

Furthermore, with the ever increasing use of mobile communication devices to conduct financial

transactions, there is, similar to lost or stolen card fraud, the risk of the mobile device being lost or stolen and then being used to conduct fraudulent transactions.

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SOLUTION SUMMARY

The solution propose by the invention relates to a method of detecting possible fraud in a transaction. The method is carried out at a server and comprises: receiving a transaction request which includes credentials of a user; receiving location information of a first location-

enabled possession of the user; receiving location information of at least one additional location-enabled possession of the user; comparing the location of the first location-enabled possession to the location of the at least one additional location-enabled possession; increasing a confidence indicator if the first location-enabled possession and t...