The problems are:

(1) This will never work for a single vendor (unless it's a massive vendor like Amazon, and they're already doing it). It's something the bank has to do so it can tie together all the information about you.

(2) Banks have proven to be totally useless at online security in the past, and I don't see that changing any time soon.

(3) Google-style security can be a bit annoying when you really are logging in from an internet cafe in a foreign country.

We don't do things like two-factor auth -- in general, we believe in minimizing friction. It's a better user experience, and if you can prevent fraud without burdening the user, why not?

We have more information with some examples of signals our system uses here: https://siftscience.com/large-scale-machine-learning

Merchant-side fraud prevention schemes are not security. They are heuristics for reducing the number of bad transactions that the vendor has to handle.

Algorithms should be air-tight. Yes, the best way to ensure that they are is to make them public. Heuristics by definition are not airtight. The best way to get utility from them is to keep their nature hidden from parties trying to abuse the system.

It's the same thing with, say, shoplifting. If you own a thrift store, and you see someone come in with a heavy coat, you might think nothing of it. But if that person acts suspiciously and holds his hands in his pockets, you may inquire as to whether that person is shoplifting. Of course, people do walk around suspiciously with hands in the pockets of big coats who are not shoplifting, but false positives like that are removed when the human element steps in at the last stage.

That doesn't seem very defensible.

And remember that the goal isn't to absolutely eliminate fraud, it's to reduce it to the point where it has negligible impact on profitability.

Except that enables people to gain information about your fraud detection system.

(I don't work for Threatmetrix- but I do use their product as provided via Cybersource.)

Seriously, they blocked the entirety of Linode's IPv6 range and there's absolutely nothing you can do about it.

Well, you can submit a false flag report, but Google customer support for suspected bots isn't great.

Amazon has a UK presence so it's only natural they accept payments from there. But it's very myopic to insist all other vendors do the same since many don't have the resources to pursue fraud cases overseas. They barely manage to get through locally.

I used to work at a fashion house that didn't ship outside the U.S. simply due to our AVS not being able to valiate addresses outside the 50 states. Losing thousands of dollars to fraud during a bleak economy isn't how people stay in business.

Amazon UK has nothing to do with the transaction. It is all through Amazon (US/.Com).

Edit: Let me clarify further...

U.S. Businesses rent services here that let their AVS take advantage of anti-fraud measures. Many of these services don't even bother looking at the shipping address, but do look at the billing to make sure the card number matches the account holder information. These services often times have no information on overseas card holders so they have no means to verify whether the actual card holder made the purchase.

Now you also have some vendors who make sure the billing address == shipping address as that's a cheap way to prevent fraud (or at least reduce it). That's not what I was talking about.

If someone uses a stolen credit card with a working address then the AVS has done nothing to mitigate the fraud, if they use a non-working address then it bounces up-stream and the AVS has done nothing, and if there is no fraud then the AVS has done nothing...

So explain to me exactly what the AVS's point is? And how it saves companies money? Isn't it up to the bank to decide what is and is not a valid address for usage with the card?

All you're doing is hitting real customers (including international ones).

http://en.wikipedia.org/wiki/Address_Verification_System

AVS doesn't work all that well outside the U.S. (Amex declines it outright) And services that do work outside are often value added (read: expensive) and for businesses that primarily cater to U.S. customers, isn't worth the price. AVS isn't just a "bank service". It's only available to merchants that use a gateway that supports it (same for CVV/2) : https://support.mivamerchant.com/supportsuite/index.php?/Kno...

And of those gateways, some don't support AVS outside mainland U.S. or only partially.

Those businesses aren't "losing money" by not catering to you. On the contrary, they're saving quite a bit by focusing on local customers.

If the causes us to miss out on a few sales it is small price to pay compared to getting hit with chargebacks.

Also AVS works fine in the UK as well as the US.

I use a PO box as my billing address. I never have anything shipped to my billing address. Also, my PO box shows up nowhere in my wallet, so, if it gets stolen, at least the thief won't have a valid billing address to use with my cards. And merchants who check billing address will decline his order when it comes through with my driver's license address.

I've never had a problem with an online merchant using the tactic you advocate. However, if I did, I would be royally pissed and bad-mouth the vendor online. Far from reducing fraud, your tactic would serve to increase it!

If you tried to order from one of those companies and failed their check, sure, they might lose your order, but it's a game of probabilities and you're making yourself a statistical outlier.

As for going on-line and bad-mouthing a vendor who uses this technique to reduce fraud, that's between you and your conscience, but if you in any way claimed that they were insecure and cost them business, don't be surprised if it becomes between you and their lawyers.

As a side note, the most heavy handed and dumb fraud detection processes I ever saw where fom very small shops who would for instance try to hand mail or phone you to have you fax them some doc.

It's a real PITA, but since someone taje time to communicate with you in a people to people level, usually I wouldn't just cancel, and try to make it work out.

Knowledge of the billing address is a means of authentication, as is knowledge of the expiration date and the CVV2. A different billing address enhances security, since a typical thief would be expecting the billing address to match whatever fleeting knowledge of the customer he gleaned during the theft. I've done many transactions using a PO box billing address and a street shipping address, all without a problem.

> As for going on-line and bad-mouthing a vendor who uses this technique to reduce fraud, that's between you and your conscience, but if you in any way claimed that they were insecure and cost them business, don't be surprised if it becomes between you and their lawyers.

My conscience says, you inconvenience me, I tell others!

As they say in Texas, Bring It On. In the United States of America, truth is an absolute defense! That means, even if you go out of business because your story was told, you've got no case unless you can prove the story teller lied deliberately while knowing the truth.

Right, but requiring that physical products are only ever sent to an address that is known to be associated directly with the card holder, at least the first time when you don't "know" the card holder yet, reduces the likely gain from fraud to near zero for third parties. That is a far more effective deterrent than any minor hurdle in the authentication process.

As they say in Texas, Bring It On. In the United States of America, truth is an absolute defense!

And which truth would that be? If you caused serious damage to a business by claiming this practice made them less secure, I expect they would have no difficulty at all lining up expert witnesses who say they have a very different idea of what makes things more secure. They would have the added advantage that this is a field where lots of people look very carefully at real numbers, so they could probably bring a mountain of statistical data in support of their position.

The goals the larger retailers have here are to reduce the number of manual approvals (things like phone follow ups) needed without compromising the fraud rate, not to turn down transactions, so there's a lot of competition for more intelligent detection.

1. Has the credit card been used by any other account holder? 2. Has the shipping address been used by any other account holder? 3. Has the phone number been used by any other account holder? 4. Has the billing address been used by any other account holder?

If any of those are true a warning or info notice is shown depending on the situation. For example, if the shipping address is used by multiple accounts an info notice is shown as there are plenty of times the same address would be used by multiple accounts (freight forwarder, sending parts to a repair shop, etc...). It reminds the order processor to check it out and verify the order is legit.

If the billing, credit card or phone number match it throws a warning as that is far less likely to happen legitimately - which is what you experienced. We don't automatically decline like Newegg did to you, but we do investigate the order thoroughly and if we aren't comfortable with it we will decline or require funds be sent via a verified papal account or wire transfer.

We use a lot of other methods for checking fraud; IP, AVS, etc... but these really simple checks have been really helpful because we get hit by the same people over and over again. They try the same card with multiple accounts or use the same shipping address on multiple accounts, etc...

If an order has been marked as fraud and any of those checks above hit then the new order is automatically marked as fraud too.

I use dirt-cheap VPS servers to tunnel web traffic over SSH socks proxies. Why? For fun. Because I can. To thwart ISP packet inspection and Google profiling my IP. To screw up IP-based ad targeting. Whatever.

I often sign up for a new VPS service while relaying from another one. I will often make it through the entire sign-up process, going through the PayPal info and everything, only to be told something like, "Your new account has been suspended due to suspicion of fraud." This only happens when I'm using a proxy. So they must be doing geo-IP lookups and flagging IP space that is a certain variance from your billing address.

I don't know how many VPS providers have lost my business due to this practice.

On the internet, everything is measurable, and fraudsters leave behind tracks they’re not even aware of. What IP address is the user coming from?

edit: oh, you probably mean 'why do you think (random business) refusal is IP based'.