American Express, First Data, Buy.com and Expedia were among the companies that announced the formation of an industry coalition dubbed the Worldwide E-Commerce Fraud Prevention Network.
Online credit card fraud has been a wide river to cross for Internet merchants--which often must foot the bill for fraudulent charges. The prevention network's main charge will be to mitigate these troubles by sharing fraud-prevention information and best practices with all merchants and consumers.
"The (network) has the potential to do what no other fraud-prevention group is doing: prioritize merchant concerns and identify specific solutions for resolving those issues," Steve Squeri, president of establishment services for American Express in Canada and the United States, said in a statement.
The group met yesterday for its first public event, a fraud-prevention seminar, at a retail-industry trade show from the National Retail Federation. The network's original founder, American Express, will fund the group's efforts for its first year, opening charter memberships to merchants of all sizes.
ClearCommerce, Starwood Hotels & Resorts Worldwide, Ventro and Paymentech also are founding members of the network. The group plans to hold fraud-prevention workshops and seminars to educate industry businesses. It also has hired the research firm Gartner to research fraud-prevention solutions.
This announcement follows a broader initiative by American Express to protect consumer privacy and security while shopping online. Earlier this month, the credit card company launched "disposable" credit card numbers for its members online. Cardholders log on to a secure Web site and receive a one-time-use credit card number to use for making an online purchase.