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Fraudsters make most of payments glitch

Fraudsters are exploiting a system designed to combat card fraud to steal goods from retailers, experts have warned.

Fraud prevention specialists the 3rd Man identified the danger to online security in a flaw in the Address Verification System (AVS), often used by Internet and mail order retailers to verify a card holder's identity.

AVS checks the user's billing address with the address filed by the card company, matching house numbers and postcodes.

Andrew Goodwill, director at thefirm, said fraudsters were compromising card details where the genuine address numerals matched the address to which they wanted delivery.

He said millions could be lost by banks and businesses.

The news also serves to highlight the vulnerability of consumer data when faced with online threats.

"More needs to be done to encourage retailers to engage with specialist fraud screening companies who detect irregular behaviour and will review unusual transactions manually. These frauds are usually detected."
Mr Goodwill also warned that cardholders who have not registered with Verified by Visa or MasterCard SecureCode could find fraudsters registering their cards.

APACS, the UK payments association, registered a 25 per cent in card-not-present fraud in 2007 compared to the previous year.

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