Glossary

Address Verification Service (AVS)

Address Verification Service is a service intended to verify the address of the cardholder for fighting fakement when shopping via the Internet or making some transactions.

In other words, the Address Verification Service is an electronic system for fraud prevention. This system analyzes the billing address which the client provides when placing an order with the address specified in the documents of the issuing bank. In case if the AVS system finds inconsistency in address details, it can be a sign of fraud, since the offender may have limited access to the cardholder’s personal data and cannot provide an exact correspondence. Although the inconsistency AVS does not ensure that the order is fraudulent, this is a sign that you need to pay attention to such payment and run an additional check in this regard.

For instance, when paying on the Internet by the card issued by a US bank, the acquiring bank is able to verify both the cardholder’s name and his billing address (it is the address to which the bank that issued the card sends the monthly statement on this card). This happens if the acquirer bank or the payment gateway through which the payment is being made uses a service called AVS (Address Verification System).

Why to use address verification service

So, the main target of this service is the check of information that the buyer indicates about his credit card and about his personality when placing the order, including the name and address of the owner, the delivery address for purchasing the goods, etc. For example, if the home address of the card owner differs from the address that is indicated in the field for the delivery of goods, then such a transaction will be examined more scrupulously and can be even rejected or the store can contact the card owner for additional supporting information.

Safety with address verification service check

It should be noted that all this anti-fraud system does not provide full protection against fraudsters. In fact, even though each of the filter elements can be circumvented, this is a demanding and time-consuming process.

It is important to indicate that a few years ago it was possible to buy goods using the generated credit card numbers and order delivery without any problems. Nowadays the purchase using a stolen credit card is represented as a complex, risky and costly scheme with several participants, each of which can be hooked by law enforcement agencies at any time. That is why, with the advent of address check service system this previously profitable type of criminal business now represents a kind of lottery, in which the risk is unjustified for the frauds that considerably reduce the total percentage of scams with credit cards.

How the address verification service business works

As a rule, this service is provided by companies that are independent of the banks. They make a request to the credit bureaus in order to verify if the entered name and billing address correspond with the given card number and then, they receive a yes or no answer. This verification service functions in the United States, and also can be acquired by acquiring banks or online stores in Australia, the United Kingdom, New Zealand, and Canada. In other countries, address verification check does not exist, so foreign online stores cannot verify if the card with such a number belongs to a person with a certain name, surname, and address.

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