Registers – Systems controlled by data bearing records – Credit or identification card systems
Patent
1995-06-22
1997-07-15
Hajec, Donald T.
Registers
Systems controlled by data bearing records
Credit or identification card systems
235379, G06K 500, G06F 1760
Patent
active
056486472
DESCRIPTION:
BRIEF SUMMARY
This invention relates to the process of validating renewal credit cards dispatched from a company issuing credit cards to its customers in such a manner that fraudulent use of a renewal credit card through theft or customer abuse is reduced.
An increasing area of concern for credit card-issuing companies today is the fraudulent use of credit cards in situations where the issuing company is liable for all losses. This type of situation exists whenever renewal credit cards are sent to the customer, since the issuing company maintains liability for the credit cards until it can be proven that the intended customer has safely received the credit card. The type of theft and fraudulent usage occurring in these circumstances can be summarized in three general categories, namely; postal system theft, third party wrong address or mailbox theft, and customer fraud. Dispatching renewal credit cards by registered mail has been used in the past to try and guarantee receipt of the credit card by the intended customer. However, this method has become extremely expensive, poses a slight inconvenience to customers, does not prevent theft from within the postal system, and in fact does not guarantee that the credit card is delivered to the intended addressee, that is, the customer.
Rudolph in U.S. Pat. No. 3,683,806 describes a theft-proof credit: card assembly consisting of two halves which are mailed separately over the course of several days to the customer, who then reassembles the halves to produce a valid credit card. This method has the disadvantages of doubling the postage costs, requiring consistent foolproof assembly by various credit card holders, and not eliminating totally the risk of theft either at the mailbox or at an old former, or otherwise incorrect, address.
U.S. Pat. Nos. 4,947,027 and 5,061,844 both describe secure credit card systems which involve the design and distribution of a new type of credit card and the use of a secret code which must be obtained from the customer. Implementation of an efficient system to obtain and record secret codes from customers is an expensive process, in addition to the extra cost of a new credit card design.
The use of an effective start date, as well as an expiry date, on a credit card has also been implemented to shorten the time period within which an issued credit card can be abused. However, this method requires expensive and timely follow-up communications with the customer to verify receipt of the issued credit card. This technique does not solve the problem of mailing credit cards to old or otherwise incorrect addresses, and has little material effect on postal system theft.
The general public knowledge of these types of problems, and poor economic conditions, have given rise to a type of fraudulent activity more difficult to deal with, wherein the card holder receives the renewal credit card, abuses it by using it with an alternate signature style, and then claims never to have received it. In a variation of this form of abuse, the card holder allows a friend or close relative to use the credit card, with a wholly fraudulent signature.
This invention seeks to curtail the potential for an individual to commit the aforementioned types of fraud with renewal credit cards. According to this invention, a credit card is sent by mail, for example from the issuing bank, to the customer. Being a renewal credit card, there exists at least one piece of information on the credit card which differs from the old credit card, which is most likely to be the expiry date, but other indicia may also be used. Upon sending the credit card, the issuing agency, for example a bank, records the new expiry date and/or other pertinent indicia for the renewal credit card in a computer memory file linked with the customer's credit card number and name. Upon receiving the renewal credit card, the customer signs the renewal credit card, but does not destroy the old credit card. At the customer's convenience, the next time a credit card purchase is made, the customer first hands over the rec
REFERENCES:
patent: 5162638 (1992-11-01), Diehl et al.
Hajec Donald T.
Le Thien Minh
Wilkes Robert A.
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