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NEW YORK (CNN/Money) -
Visa USA has launched an enhanced alert system designed to identify coordinated fraud attacks for all U.S. cardholders, the company said Monday.
The Advanced Authorization system, an upgraded version of Visa's current fraud protection system, is intended to detect fraud patterns instantaneously and prevent counterfeit transactions at the checkout line, the company said in a statement.
The new technology, which is being rolled out now, is an upgraded version of Visa's current system, which keeps track of fraud patterns on individual cardholders' accounts and across Visa's payment network.
Every time a Visa check card or credit card is swiped, the Advanced Authorization system assesses the likelihood that the transaction is fraudulent. It then sends the information to the issuer of the card, which then uses the information to decide whether or not to approve the sale.
The main enhancement of the new system is that it can compare each authorization request to data on all transactions in the Visa network, as well as other risk data, such as compromised accounts where personal data has been stolen.
Ken Ragan, executive vice president of Missouri-based Commerce Bank, said this will help protect against attacks that target a specific bank, such as the Web-based scam phishing.
Phishing occurs when phony e-mail messages that look like they are from banks or other businesses direct recipients to fake Web pages, where the unwitting victims are asked for personal information such as passwords or credit card numbers.
By monitoring transactions systemwide, Visa said it can better detect emerging fraud threats and shut them down on the spot.
Visa, which has about 463 million of its cards in circulation in the United States, said it expects the new protection system will prevent about $164 million in fraud losses over the next five years.
Besides identifying fraud sooner, the Advanced Authorization system does a better job of analyzing risk with greater accuracy, according to Ragan, whose bank participated in a pilot run of the program.
He said this benefits customers, especially when it comes to lowering the number of "false positives," referring to the situation in which purchases that look suspicious but are really legitimate are flagged and denied.
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