Meaning of Successful Liability Shift For The Enrolled Card Is Required Only For Fans

January 25, 2023 7:32 pmComments Off on Meaning of Successful Liability Shift For The Enrolled Card Is Required Only For FansViews: 30

Meaning of Successful liability shift for the enrolled card is required Only for Fans

In the case of fraudulent transactions authenticated through 3DS, the party that has failed to authenticate them is likely to be held liable by its customers for the loss sustained. The problem of successful liability shift for the enrolled card required is getting worse every day. It is mainly because of negligence in the authentication process. 

However, there are several exceptions where even if a merchant fails to authenticate a transaction through the 3DS protocol, it will not result in a liability shift of responsibility. The liability shift is an automatic passing over of liability for fraudulent transactions to the issuers of credit cards when the merchants have passed on their authentication responsibilities using the 3DS protocol. There are several exceptions where even if a merchant fails to authenticate a transaction through the 3DS protocol, it will not result in a liability shift of responsibility.

Credit card fraud covers any fraud relating to credit cards. It refers to the fraudulent use or possession of credit card details by a person other than the authorized user without the knowledge & consent of the valid owner whose name appears on that card. The term “credit card” includes all cards issued by credit organizations, such as Visa or Master Card. 

The term “fraudulent use” means any fraudulent activity intended to deprive the issuer of its money or property without the consent of the valid owner’s name appearing on the credit card. It includes obtaining, using, or possessing a stolen credit card. The liability shift applies to all cards issued by various credit-card banks worldwide. Claims made in cases where liability shift is involved are not limited to fraudulent transactions but extend to other cases whether or not they involve fraud. Let’s discuss everything you should know about the required successful liability shift for enrolled cards. 

What is liability shift?

When a credit card-issuing bank authorizes a credit card transaction, specific rules must be followed. The bank and the merchant agree upon these rules in advance as a part of their contract. The contracts are not legal documents but are for mere convenience. When an individual presents his credit card at a merchant’s establishment, this contract becomes applicable, and the merchant is expected to follow through with it. 

If the individual uses his card fraudulently without having permission or knowledge of its valid owner, this would be termed “credit card fraud.” The term successful liability shift for the enrolled card required prevalent on the internet today because you might see it on only fans. In this case, the liability for payment of the fraudulent transaction is supposed to be borne by the credit card bank. However, in a case where the user fails to authenticate fraudulent transactions using a 3D secure (3DS) protocol, then it is likely that the merchant will be held responsible for fraud.

 This shift of responsibility from one party to another is called a “liability shift.” For example, suppose someone were to willfully commit forgery or fraud in any other form (i.e., stealing a wallet containing credit card details). In that case, the law does not differentiate between such cases and those where only credit card details have been obtained by deception.

Only Fans require the successful shift of liability for an enrolled card:

Only Fans is a website that deals in adult content. Since this type of work was subject to potential fraud, they approached their credit card issuing bank and asked them to provide them with a mechanism through which they could be insured against fraudulent transactions. 

The bank provided a solution that they could share their customer’s credit card information with 3DS protocol-enabled merchants through the use of tokenization. This solution ensured that only the last four digits of the debit card were passed on to the merchants, thereby reducing vulnerability. In addition, tokenization ensures that payment information is not shared with merchants and, therefore, cannot be used for fraudulent transactions.

What is the meaning of Liability Shift when we say, “Successful liability shift for the enrolled card is required”?

Liability shift means that merchants or customers might lose money in certain transactions involving fraud. Since we are discussing a process that ensures ‘protection’ against transaction fraud, these parties bear all associated costs. In cases where a liability shift did not happen and where fraudulent transactions were authenticated using 3DS protocols, merchants incur additional expenses while handling these fraudulent transactions as they have to do multiple authentications of each transaction and incur costs in doing so. The liability shift is used when credit cards issued by various banks worldwide become involved in fraudulent deals.

Liability Shift through 3D Secure:

3D Secure is a standard set of protocols developed by Visa, MasterCard, American Express, and JCB (Japan Credit Bureau) under the guidance of ISO. It allows for a secure transaction process that requires a PIN to be entered before the cardholder approves online transactions. Furthermore, to avoid fraudulent transactions, the 3DS protocol also takes care of “tokenization,” meaning that only four digits must be entered by the user instead of the entire 16-digit credit card number.

3D Secure is an instant security system that verifies whether or not the transaction should be approved or not. In addition, this system can work over different networks, thus leaving less room for fraudsters. As a result, it has been considered among the leading methods of reducing fraud in financial transactions.

What is the meaning of the term “liability shift” on credit cards?

Liability shift means that when a customer does not authenticate fraudulent transactions using the 3DS protocol, the credit card party assumes liability for this transaction. When this happens, merchants incur various costs, such as loss of profit and extra work associated with handling these fraudulent transactions.

Budget and Cost Analysis of Liability Shift by 3D Secure:

The financial burden associated with liability shift is enormous. The main reason is that merchants often invest their money in extra security measures to protect against fraud. The more sophisticated implementation options usually result in additional expenses that the merchants must bear. With the creation of liability shift, it is impossible for those merchants that do not use the 3DS system to authenticate transactions to authenticate fraudulent ones.

On the other hand, those merchants who lose this option have been the subject of criticism. Some people think that if merchants are not allowed to authenticate any transaction related to credit card fraud cases, it will be possible for hackers to get hold of the details and approaches they will use in future fraudulent transactions. 

Anyway, there is no doubt that this financial burden on merchants is substantial, and they incur expenses while handling fraud on credit cards. The main reason for credit card fraud is that cards have 16 numbers, and the internet does not protect this number. Instead, all credit cards on the market are protected by top-notch technology called 3DS.

The benefits of running a Liability shift through 3D Secure:

Security: By implementing 3D Secure, the chances for fraudulent transactions to occur reduces considerably. The security measures associated with it are designed so that it does not share the number of credit card details with merchants or request any transaction history. Hence, hackers can never get any information about you or your bank account in case they get hold of your details.

The portion mentioned above is everything you should know about successful liability shift for the enrolled card is required.

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