Porn use pumps fraud figures

Figures on credit card fraud are being exaggerated because of users of pornography sites, says Visa New Zealand's country manager Daniel Jeffares, who says problems are more often disputed transactions than fraud. But at least one New Zealand resident claims his credit card details were ripped off while the card sat safe in his wallet.

Figures on credit card fraud are being exaggerated because of users of pornography sites, says Visa New Zealand's country manager Daniel Jeffares.

"Let's be blunt, the typical scenario is somebody accessing an adult site. A lot of them require some form of proof of being over the age of 18, usually a credit card number." Surfers then discover there are charges being added to their credit card, and they are unable to withdraw from the 'service'," he says. "They then deny having ever accessed those sites and claim their card has been used fraudulently."

Jeffares says this is more properly called a disputed transaction than fraud. New Zealand has one of the lowest levels of credit card fraud in the world, he claims. "In terms of total fraud, it's negligible at this point in time. We haven't seen circumstances where Internet fraud has caused any sort of increase in overall fraud, which is also decreasing," says Jeffares.

But at least one New Zealand resident has had his credit card details ripped off while the card sat safe in his wallet. "I came back from three months in the UK to discover a bill for $2000," says the card holder, who does not want to be named. He expects more fraudulent use to be uncovered, as the bill only covers the month up to May 5 because, although he cancelled his card when he discovered the problem, that wasn't until May 21.

Although the holder does not have an Internet connection, he found his card details had been used to pay for online services and to subscribe to two publications.

"I wouldn't use my card online - it's just not safe. The only thing I did do was fax my details to a magazine in England in January." The holder uses the card infrequently, and the range of services bought using his number are so specific that he hopes tracking down the culprit will be relatively straight forward.

Jeffares says whether fraudulent users are chased or not is up to the banks involved, and it's a process that's been in place since credit cards were first issued. Once a card holder realises fraud has been committed, they should immediately contact the bank that issued the card.

"The bank will then go back to the acquirer of those transactions, the bank that has the relationship with the merchant. The liability for that transaction falls either on the acquiring bank or the merchant." In the event of a dispute between the two banks, Visa will act as an intermediary.

The card holder may be liable for "typically up to $50" although Jeffares says that is up to the issuing bank. Usually it is the merchant who has to bear the cost of the fraud, says Jeffares.

"Only in some circumstances, when the merchant has done absolutely everything right, will it fall on the bank."

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