STRATEGIC PARTNERS
February 27, 2002
SAN FRANCISCO -- Visa U.S.A. has approved a new operating regulation designed to further protect Visa cardholders against losses from credit or debit card fraud.
The new rule, which will take effect in April, replaces a Visa policy adopted in 1997, under which cardholders could be held liable for up to $50 if their Visa credit or debit cards were used fraudulently. The previous policy mandated zero liability, but only if the fraud, theft or unauthorized card use was reported within two business days.
The new rule covers the use of all Visa consumer card products including transactions made online -- and eliminates the two-day stipulation.
Visa also reported that overall card fraud losses in 1999 dropped to an all-time low of 0.06 percent of total transaction volume -- or just 6 cents for every $100 in transactions. That's down from 0.07 percent in 1998 and 0.18 percent in 1992.
"The Visa brand has long stood for secure payment, and our declining fraud rates illustrate that Visa's war on credit fraud is working. Consumers can continue to use their Visa cards confidently everywhere they want to be, including the Internet," said Carl F. Pascarella, president and CEO of Visa U.S.A.
Pascarella cited several reasons for the drop in card fraud, including Visa's implementation of neural networks, which use artificial intelligence to recognize potential fraudulent transactions. The networks are capable of alerting member banks to potential fraudulent activity as often as every 10 minutes. The Visa network, at its peak, processes some 3,500 transactions per second.
Visa U.S.A.'s online commerce unit, e-Visa, also recently rolled out advanced fraud-screen technology tailored for online merchants. The technology uses artificial intelligence and a Visa database to flag potentially fraudulent transactions made over the Internet.
