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Thursday, March 04, 2004
Toral: Dealing with payment fraud
By Janette Toral
Digital Filipino
E-COMMERCE. One of the primary hindrances in pushing for e-commerce in the country is the lack of jurisprudence and procedures on how to handle online credit card payment fraud.
For Paul Hubbard, country manager of Yes Group in the Philippines, this is one challenge they decided to confront on a high-profile level.
YesPinoy.com is a website similar to Ikobo.com and Western Union that allow Filipinos based overseas to send money to their contacts in the Philippines.
One has to create an account in their website and use a credit card to transmit funds. The recipient will get a Smart Money ATM card and withdraw the cash from any MegaLink ATM bank.
Three months after the launch of YesPinoy.com, the site became a target of a syndicate using stolen credit card details.
Paul explained: “The positive side to the attack was that our systems detected the fraud early, and we were able to work with the banks and the NBI to make arrests. The credit card details were obtained in the USA.”
Although they were able to detect the crime quickly, it was difficult to coordinate with relevant
authorities. As the story went to various news media, Paul received calls from other providers who had experienced the same thing.
Since the passage of the E-Commerce Law last June
2000, there has been no conviction made using the law primarily due to the lack of complainants’ determination to bring their case to court.
There were claims by some that the law was not strong enough to protect the industry. In the case of YesPinoy.com, this will be put to the test when their cases go to trial.
When the E-Commerce Law was being lobbied for, everyone agreed that it was a start of many future lawsaiming to strengthen it. Trying to push for perfect legislation right from the start will only result in the delay in its passage.
On the other hand, the law has to be put to the test for one to authoritatively and responsibly say the law is weak and will not protect the industry and fraud victims in court.
With numerous bills being pushed, urgency needs to be justified by an actual case or industry problem.
I have been accepting credit card payments online for the past four years, and I haven’t experienced fraud. Perhaps this is due to the nature of the products I sell.
Knowledge-based products like e-books or reports are not easy to resell, unlike perfume or jewelry.
Companies will just have to set up due diligence procedures to counter these challenges.
Definitely, the opportunity for global trade through the Internet is huge, and those who are ignoring it are missing a lot.
For small and medium enterprises, it has served as an effective, friendly and
low-cost medium of doing business.
(email: janette@digitalfilipino.com.)
(March 4, 2004 issue)
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