Peter Cohen presented more about fraud programs from the schemes.

2. Online fraud is still a big problem and as long as the number of online shoppers continues to grow, so will the
number of fraud cases. According to the European Central Bank there were 7.9 million cases of fraud with a value
of 1.16 billion euros in 2011 of which 56% took place in e-commerce.
European Merchant Services organizes the EMS RISK EVENT annually for retailers who are active in e-commerce
and multichannel. It is an excellent opportunity to increase your knowledge in the field of online fraud, risk
management and advanced fraud prevention and detection tools. We help you to stay ahead of online fraudsters
and to protect your online business by sharing the knowledge and experience of our fraud and risk experts, our
customers and our partners.
Do you want to attend next year’s EMS RISK EVENT?
Please contact the EMS Marketing Department at T +31 20 660 3054 or send an email to
marketing@emscard.com. For more information visit www.emscard.com/riskevent
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3. MasterCard and Visa Europe
Merchant Fraud Programs
EMS Risk Event - 24 September 2013
Peter Cohen – Manager Compliance

4. Merchant Fraud Programs
Agenda
• Introduction
• Knowledge check
• The Fraud Program Rules
• Relation with chargebacks and Chargeback Programs
• What EMS can do for you!

5. Will you be targeted by fraudsters?

6. Visa Fraud Programs
Europe Region Global Fines and consequences
• $ 15 000 of reported fraud; and • $ 25 000 of reported fraud; and
• 15 fraud transactions; and • 25 fraud transactions; and
• 7,5% fraud-to-sales ratio • 2.5% fraud-to-sales ratio
• $ 1 000 of reported fraud; and
• 3 fraud transactions; and
• 3 % fraud-to-sales ratio
• no Exit after 3 months Minimum; or • no exit after 3 months Minimum; or • Chargeback Window: full liability for all reported fraud
transactions
• $ 40 000 of reported fraud; and • $ 250 000 of reported fraud; and • Fines starting from $ 5 000
• 20 fraud transactions; and • 2,5% fraud-to-sales ratio
• 20% fraud-to-sales ratio (average
of 3 months)
3 consecutive months under Exit
thresholds
Excessive
Exit 3 consecutive months under Minimum
threshold
Minimum None
Exit within 3 months under Minimum
threshold
Europe Region Global Fines and consequences
• $ 15 000 of reported fraud; and • $ 25 000 of reported fraud; and
• 15 fraud transactions; and • 25 fraud transactions; and
• 7,5% fraud-to-sales ratio • 2.5% fraud-to-sales ratio
• $ 1 000 of reported fraud; and
• 3 fraud transactions; and
• 3 % fraud-to-sales ratio
• no Exit after 3 months Minimum; or • no exit after 3 months Minimum; or • Chargeback Window: full liability for all reported fraud
transactions
• $ 40 000 of reported fraud; and • $ 250 000 of reported fraud; and • Fines starting from $ 5 000
• 20 fraud transactions; and • 2,5% fraud-to-sales ratio
• 20% fraud-to-sales ratio (average
of 3 months)
3 consecutive months under Exit
thresholds
Excessive
Exit 3 consecutive months under Minimum
threshold
Minimum None
Exit within 3 months under Minimum
threshold

7. MasterCard Fraud Program
Violation Thresholds Fees and Fines
•Tier 1 • $ 3 000 of reported fraud
• 3 Fraud transactions
• 3 % fraud-to-sales ratio
None
•Tier 2 • $ 4 000 of reported fraud
• 4 Fraud transactions
• 5 % fraud-to-sales ratio
None
•Tier 3 • $ 5 000 of reported fraud
• 5 Fraud transactions
• 8 % fraud-to-sales ratio
• $ 15 000 for not submitting a response to
special audit questionnaire
• Chargeback liability for a period of 6-12
months for non compliance with Mastercard
recommended Fraud Control Action Plan

8. Merchant Fraud Programs
Relation with chargebacks and Chargeback Programs
Chargebacks and Chargeback Programs are unrelated to the Merchant
Fraud Programs!
‘3D Secure’, MasterCard SecureCode and Verified by Visa, are no silver
bullet.
Fully Authenticated fraud is out there…
(phishing is on the rise)

9. Merchant Fraud Programs
What EMS can do for you!
We inform you timely about Fraud Program related messages.
We can provide you with an overview of your authorisations and
transactions.
We can provide you with frequent EMS Fraud Reports.
We can advise on data analysis.

10. Merchant Fraud Programs
What EMS can do for you!
We can provide fraud prevention best practices:
- Compare country where card was issued against delivery address.
- Evaluate authorisation data.
- Evaluate multiple use of the same card (on the same day)

11. Merchant Fraud Programs
What EMS can do for you!
You can prevent or limit fraud from occurring by using all available
information and taking a step back from your business to be able to
clearly spot any unwanted authorisation and transactional patterns!
Why should I prevent fraud if my fraud performance is under the
Scheme Program criteria?

12. Merchant Fraud Programs