Source: https://patents.justia.com/patent/8336764
Timestamp: 2020-08-06 22:07:59
Document Index: 294260603

Matched Legal Cases: ['§119', 'Application No. 60', 'Application No. 593732', 'Application No. 2007208251', 'Application No. 2007208251', 'Application No. 2007208251', 'Application No. 570617', 'Application No. 570617', 'Application No. 2640136']

US Patent for Fraud control when granting instant credit Patent (Patent # 8,336,764 issued December 25, 2012) - Justia Patents Search
Justia Patents Banking SystemsUS Patent for Fraud control when granting instant credit Patent (Patent # 8,336,764)
Fraud control when granting instant credit
Dec 29, 2006 - American Express Travel Related Services Company, Inc.
Credit applicants may apply for instant credit, and use an instant account number (“IAN”) to make purchases after the instant credit has been granted. Fraud control methods may be used in authorizing the instant credit. When the IAN is issued to purchase airline tickets, it can be ensured that the applicant's last name matches the passenger's last name for the airline ticket being purchased, and that the ticket will not be renamed or sold. When the IAN is issued in conjunction with a partner's loyalty or rewards program, the applicant's account information with the rewards program is captured. It is ensured that the applicant has some tenure with the partner and that data submitted by the applicant is consistent with data on file with the partner.
Latest American Express Travel Related Services Company, Inc. Patents:
Security related data for a risk variable
BOT FACTORY ENVIRONMENT
INTEGRATED VOICE AND DATA COMMUNICATIONS ENVIRONMENT
Automated web service and API build configuration framework
Merchant receipt of a first portion of an account number from an issuer and a second portion from a consumer
This application claims the benefit under 35. U.S.C. §119(e) of U.S. Provisional Patent Application No. 60/761,765, filed Jan. 25, 2006, which is incorporated by reference herein in its entirety.
The present invention relates to controlling fraud when applications for instant credit are granted.
Credit card applicants often desire an instant decision and instant ability to charge on the credit card (e.g., instant spend) when they submit an application for credit. In one example, applicants are able to immediately utilize the new credit when an instant account number (“IAN”) is issued. However, for the credit grantor, authenticating the applicant can be difficult.
A variety of controls have previously been employed by credit grantors to authenticate the IAN applicant. For example, when the application is submitted in person, the grantor can physically check the applicant's identification. Although, such a control does not work over the Internet or telephone. In another example, the grantor can limit the line of credit associated with the IAN. However, various credit partners may require that certain minimum credit lines be approved, which can be inconsistent with this type of fraud control. The grantor may also attempt to authenticate the applicant by asking “out-of-wallet questions” (e.g., “what is your mother's maiden name?”), but the applicant may have privacy concerns and not freely want to give out this information. Also, such out-of-wallet information may be easily available to the fraud perpetrator. Therefore, what is needed is a better way of controlling fraud when issuing IANs.
In one example, when an IAN is issued in order for an applicant to purchase airline tickets, a verification can be made that the applicant's last name matches at least one of the passengers' last names for the airline tickets being purchased, and it can also be verified that the ticket will not be renamed or sold. Fraud control is achieved when security agents check the name on the ticket against identification presented by the applicant when the applicant uses the airline ticket.
In another example, when an IAN is issued in conjunction with a partner service provider's loyalty or rewards program, the applicant's account information with the rewards program is captured. It is then verified that the applicant has some tenure (e.g., connection or a predetermined length of time) with the partner service provider and that data submitted by the applicant is consistent with data on file for the applicant with the partner service provider. Fraud control is achieved through this dual layer of security because the fraud perpetrator would have to illegally obtain both partner service provider data and personal information about the intended victim.
The accompanying drawings, which are incorporated herein and form a part of the specification, illustrate embodiments of the present invention and, together with the description, further serve to explain the principles of the embodiments of the invention and to enable a person skilled in the pertinent art to make and use the invention.
FIG. 1 is a flowchart of an example method of controlling fraud when an IAN is issued in order for an applicant to purchase an airline ticket.
FIG. 2 is a flowchart of an example method of controlling fraud when an IAN is issued in conjunction with a partner service provider's loyalty or rewards program.
FIG. 3 is a block diagram of an exemplary computer system useful for implementing embodiments of the present invention.
The terms “user,” “end user,” “consumer,” “customer,” “participant,” and/or the plural form of these terms are used interchangeably throughout herein to refer to those persons or entities capable of accessing, using, being affected by and/or benefiting from the tool that the present invention provides for granting instant credit.
1. Transaction Accounts and Instrument
A financial transaction instrument may be traditional plastic transaction cards, titanium-containing, or other metal-containing, transaction cards, clear and/or translucent transaction cards, foldable or otherwise unconventionally-sized transaction cards, radio-frequency enabled transaction cards, or other types of transaction cards, such as credit, charge, debit, pre-paid or stored-value cards, or any other like financial transaction instrument. A financial transaction instrument may also have electronic functionality provided by a network of electronic circuitry that is printed or otherwise incorporated onto or within the transaction instrument (and typically referred to as a “smart card”), or be a fob having a transponder and an RFID reader.
2. Open Versus Closed Cards
“Open cards” are financial transaction cards that are generally accepted at different merchants. Examples of open cards include the American Express®, Visa®, MasterCard® and Discovery® cards, which may be used at many different retailers and other businesses. In contrast, “closed cards” are financial transaction cards that may be restricted to use in a particular store, a particular chain of stores or a collection of affiliated stores. One example of a closed card is a pre-paid gift card that may only be purchased at, and only be accepted at, a clothing retailer, such as The Gap® store.
3. Stored Value Cards
4. Use of Transaction Accounts
5. Account and Merchant Numbers
The first five to seven digits are reserved for processing purposes and identify the issuing institution, card type, etc. In this example, the last (sixteenth) digit is typically used as a sum check for the sixteen-digit number. The intermediary eight-to-ten digits are used to uniquely identify the customer, card holder or cardmember.
A merchant account number may be, for example, any number or alpha-numeric characters that identifies a particular merchant for purposes of card acceptance, account reconciliation, reporting and the like.
II. Fraud Control
FIG. 1 is a flowchart illustrating an example fraud control method 100 used when an IAN is issued so that an applicant can purchase an airline ticket. Method 100 ensures (e.g., verifies) that the applicant's last name matches at least one of the passengers' last names for airline tickets being purchased with the IAN, and also ensures that the ticket will not be renamed or resold. FIG. 1 is divided into three lanes 102, 104, and 106. Each lane is assigned to a different party (e.g., partner airline, credit grantor, and airline security agents), and steps that are illustrated in a particular lane are typically performed by the respective party. Partner lane 102 includes steps that are taken by an airline ticketing agency partnering with a credit grantor. Credit grantor lane 104 includes steps that are taken by a credit grantor. Airline security agent lane 106 includes steps that are taken by a security agent when the applicant is at the airport.
In partner lane 102, method 100 begins at step 108, in which the applicant accesses an airline ticketing agency partnering with a credit grantor through, for example, a website or telephone service. Although method 100 will be described using a web-based application procedure, one of skill in the art will recognize that method 100 may also be performed in other ways, such as over the telephone. After step 108, method 100 proceeds to step 110.
In step 110, the applicant requests a ticket from the partner airline ticketing agency. The ticket request is made through the airline company's normal booking procedure. When making the request, the applicant enters the applicant's personal information. Such personal information may include, for example and without limitation, the applicant's name and billing address. After the ticket is requested, method 100 then proceeds to step 112.
In step 112, the partner airline ticketing agency offers the applicant an opportunity to apply for a transaction card with the credit grantor, and then purchase the airline ticket using the new transaction card. The credit grantor may be a credit card company such as, for example, American Express Co. of New York, NY. The offer may be made by the airline ticketing agency by means of, for example and without limitation, a pop-up window, an embedded advertisement and link, a check box to be selected by the applicant, or an additional webpage between a ticket request webpage and a payment webpage.
In step 114, it is determined whether the applicant accepts the offer to apply for a transaction card. If it is determined in step 114 that the applicant does not accept the offer, method 100 proceeds to step 116, in which the ticket purchase is completed according to the standard procedure followed by the airline. If it is determined in step 114 that the applicant does accept the offer, method 100 proceeds to step 118.
In step 118, the airline ticketing agency pre-fills an instant credit application for the applicant. This can be based on, for example, the personal information entered by the applicant in step 110. In step 120, the applicant completes the instant credit application by filling in any missing information necessary to process the credit request. After step 120, the partner airline ticketing agency forwards the instant credit application to the credit grantor for approval, and method 100 proceeds to step 122.
In credit grantor lane 104, in step 122, the credit grantor receives the instant credit application from the partner airline ticketing agency, along with a request to make a decision regarding the instant credit application. Method 100 then proceeds to step 124.
In step 124, the credit grantor either approves or declines the request for instant credit by the applicant. This decision may be made according to the standard operating procedures of the credit grantor.
If the instant credit application is declined in step 124, method 100 proceeds to step 116. In step 116, the ticket purchase is completed without using an IAN, and the applicant must complete the purchase using some other means of payment.
If the instant credit application is approved in step 124, method 100 proceeds to step 126. In step 126, the credit grantor provides the customer with an IAN. Method 100 then proceeds to step 116, in which the ticket purchase is completed using the LAN. The digits in the instant account number may, for example, correspond to the digits that will appear on a transaction card that will be issued to the applicant and linked to the newly created credit account, or may be an entirely different account number.
To ensure that the applicant uses the ticket purchased in the applicant's name, the purchased ticket may be prevented from being renamed or resold. One way of preventing renaming or resale of the ticket is to associate a flag with the ticket in a ticketing system of the partner airline agency. The flag will alert representatives of the partner airline agency that requests to change the name on the ticket should be denied.
After the ticket purchase is completed in step 116, method 100 proceeds to step 128.
In airline security agent lane 106, in step 128, the applicant checks in at the airport of departure. In step 130, an airport security agent verifies that the name of the passenger using the ticket is the same as the name of the applicant. This may be done, for example, by comparing the name on the airline ticket with the name on the passenger's identification. The verification by the airport security agent is utilized to ensure that a third party cannot fraudulently open an account under the applicant's name, and then attempt use the newly opened account for the third party's benefit. Method 100 then ends at step 132.
FIG. 2 is a flowchart illustrating an example fraud control method 200 used when an IAN is issued in conjunction with a loyalty or rewards program of a partner service provider (hereinafter, partner). The partner may be, for example, an airline or hotel, and the rewards program may be, for example, a frequent flyer or frequent guest program. In method 200, the applicant's account information used for the partner's rewards program is captured by a credit grantor. Use of existing rewards account information ensures that the applicant has some tenure (e.g., connection) with the partner, and that the data submitted in the instant credit application is consistent with the applicant's data on file with the partner. Fraud control is achieved because the perpetrator of the fraud would have to compromise (e.g., illegally obtain) data from the partner, as well as personal information about the intended victim. FIG. 2 is divided into two lanes 202 and 204. As with FIG. 1, each lane is assigned to a different party (partner and credit grantor), and steps that are illustrated in a particular lane are performed by the respective party. Partner lane 202 includes steps that are taken by the partner. Credit grantor lane 204 includes steps that are taken by the credit grantor.
Method 200 begins with step 206 in partner lane 202, in which the customer of the partner requests an application for an IAN from the credit grantor. Such a request may be made in conjunction with, for example and without limitation, an airline ticket reservation or a lodging reservation. Method 200 then proceeds to step 208.
In step 208, the partner pre-fills the instant credit application, for example based on information from the rewards account associated with the applicant. In step 210, the applicant completes any additional information requested by the instant credit application. Information on the instant credit application may include, for example and without limitation, the partner rewards account number, the applicant's social security number, the name of the applicant, and the billing address of the applicant. Such information may be entered by one or both of the partner or the applicant. Once the application is complete, method 200 proceeds to step 212.
In step 212, the partner transmits the instant credit application to the credit grantor for a decision, which can be done in real time.
In credit grantor lane 204, in step 214 the credit grantor receives the instant credit application transmitted from the partner.
In step 216, the application is processed by the credit grantor according to the standard operating procedures of the credit grantor. The rewards program name and tenure of the applicant with the rewards program may be considered in the decision. Additionally, information about the applicant from the partner's rewards program may be processed for comparison with information entered by the applicant on the instant credit application. Since it is presumed that only the owner of the partner's rewards account has access to the rewards account, the identity of the applicant is confirmed by the partner before the application for instant credit is made.
In step 218, the credit grantor either approves or declines the instant credit application.
If the credit grantor declines the instant credit application, method 200 proceeds to step 220. In step 220, the credit grantor transmits a declination decision to the partner, which can then be communicated to the applicant.
If the credit grantor approves the instant credit application in step 218, method 200 proceeds to step 220. In step 220, an approval decision is transmitted to the partner by the credit grantor. Once either the declination or approval decision has been transmitted to the partner, method 200 proceeds to step 222.
Again, in partner lane 202, in step 222, if the instant credit application was declined (e.g., a declination decision was transmitted to the partner), the customer is notified of the declination. If the instant credit application was approved (e.g., an approval decision was transmitted to the partner), the customer is provided with the LAN. Method 200 ends with step 224.
In one example, the customer can then use the IAN to complete a purchase. The purchase may be, for example without limitation, a reservation for an airline ticket or lodging.
III. Example Implementations
The present invention (e.g., methods 100 or 200 or any part(s) or function(s) thereof) may be implemented using hardware, software or a combination thereof and may be implemented in one or more computer systems or other processing systems. However, the manipulations performed by the present invention were often referred to in terms, such as adding or comparing, which are commonly associated with mental operations performed by a human operator. No such capability of a human operator is necessary, or desirable in most cases, in any of the operations described herein which form part of the present invention. Rather, the operations are machine operations. Useful machines for performing the operation of the present invention include general purpose digital computers or similar devices.
In fact, in one embodiment, the invention is directed toward one or more computer systems capable of carrying out the functionality described herein. An example of a computer system 300 is shown in FIG. 3.
The computer system 300 includes one or more processors, such as processor 304. The processor 304 is connected to a communication infrastructure 306 (e.g., a communications bus, cross-over bar, or network). Various software embodiments are described in terms of this exemplary computer system. After reading this description, it will become apparent to a person skilled in the relevant art(s) how to implement the invention using other computer systems and/or architectures.
Computer system 300 can include a display interface 302 that forwards graphics, text, and other data from the communication infrastructure 306 (or from a frame buffer not shown) for display on the display unit 330.
Computer system 300 also includes a main memory 308, preferably random access memory (RAM), and may also include a secondary memory 310. The secondary memory 310 may include, for example, a hard disk drive 312 and/or a removable storage drive 314, representing a floppy disk drive, a magnetic tape drive, an optical disk drive, etc. The removable storage drive 314 reads from and/or writes to a removable storage unit 318 in a well known manner. Removable storage unit 318 represents a floppy disk, magnetic tape, optical disk, etc. which is read by and written to by removable storage drive 314. As will be appreciated, the removable storage unit 318 includes a computer usable storage medium having stored therein computer software and/or data.
In alternative embodiments, secondary memory 310 may include other similar devices for allowing computer programs or other instructions to be loaded into computer system 300. Such devices may include, for example, a removable storage unit 318 and an interface 320. Examples of such may include a program cartridge and cartridge interface (such as that found in video game devices), a removable memory chip (such as an erasable programmable read only memory (EPROM), or programmable read only memory (PROM)) and associated socket, and other removable storage units 318 and interfaces 320, which allow software and data to be transferred from the removable storage unit 318 to computer system 300.
Computer system 300 may also include a communications interface 324. Communications interface 324 allows software and data to be transferred between computer system 300 and external devices. Examples of communications interface 324 may include a modem, a network interface (such as an Ethernet card), a communications port, a Personal Computer Memory Card International Association (PCMCIA) slot and card, etc. Software and data transferred via communications interface 324 are in the form of signals 328 which may be electronic, electromagnetic, optical or other signals capable of being received by communications interface 324. These signals 328 are provided to communications interface 324 via a communications path (e.g., channel) 326. This channel 326 carries signals 328 and may be implemented using wire or cable, fiber optics, a telephone line, a cellular link, a radio frequency (RF) link and other communications channels.
In this document, the terms “computer program medium” and “computer usable medium” are used to generally refer to media such as removable storage drive 314 or a hard disk installed in hard disk drive 312. These computer program products provide software to computer system 300. The invention is directed to such computer program products.
Computer programs (also referred to as computer control logic) are stored in main memory 308 and/or secondary memory 310. Computer programs may also be received via communications interface 324. Such computer programs, when executed, enable the computer system 300 to perform the features of the present invention, as discussed herein. In particular, the computer programs, when executed, enable the processor 304 to perform the features of the present invention. Accordingly, such computer programs represent controllers of the computer system 300.
In an embodiment where the invention is implemented using software, the software may be stored in a computer program product and loaded into computer system 300 using removable storage drive 314, hard drive 312 or communications interface 324. The control logic (software), when executed by the processor 304, causes the processor 304 to perform the functions of the invention as described herein.
receiving, by a computer based system for issuing a transaction account, an instant transaction account application containing information about an applicant from an airline ticketing agency;
developing, by the computer based system and to control fraud, an instant transaction account application authorization decision based at least in part on the instant transaction account application;
developing, by the computer based system and to control fraud, an instant transaction account application authorization decision based on tenure of the applicant in a third party rewards program with respect to a transaction account issuer provided by the airline ticketing agency; and
developing, by the computer based system and to control fraud, an instant transaction account application authorization decision based on comparing applicant provided instant transaction account application information and information associated with the rewards program provided by the airline ticketing agency, wherein the airline ticketing agency is not the transaction account issuer;
providing, by the computer based system, an instant transaction account code in response to the authorization decision indicating approval of the instant transaction account application.
limiting, by the computer based system, an airline ticket purchased in the applicant's name using the instant transaction account code to not be renamed or resold, such that the name on the ticket can be compared with the name of the applicant associated with the instant transaction account code if the applicant attempts to use the ticket.
3. The method of claim 2, wherein the limiting comprises:
flagging the airline ticket in a reservation system of the airline ticketing agency to indicate that the ticket cannot be renamed or resold.
4. The method of claim 1, wherein the instant transaction account code is used to purchase an airline ticket from the airline ticketing agency.
5. The method of claim 1, further comprising offering, by the computer based system, the instant transaction account to the applicant in response to the applicant making a reservation with the airline ticketing agency.
6. The method of claim 1, wherein the instant transaction account application is received from a database of the airline ticketing agency.
7. The method of claim 1, wherein the instant transaction account application contains information received from at least one of the airline ticketing agency or information received from the applicant.
receiving, by a computer based system for issuing a transaction account, an instant transaction account application containing information about an applicant from a partner service provider, wherein the applicant has a rewards program account sponsored by the partner service provider;
developing, by the computer based system and to control fraud, an instant transaction account authorization decision based on tenure of the applicant in a third party rewards program with respect to a transaction account issuer provided by the partner service provider;
developing, by the computer based system and to control fraud, an instant transaction account application authorization decision based on comparing applicant provided instant transaction account application information and information associated with the rewards program account of the applicant;
developing, by the computer based system and to control fraud, an instant transaction account authorization decision based at least in part on information associated with the rewards program; and
providing, by the computer based system, an instant transaction account code in response to the transaction account authorization decision resulting in approval of the instant transaction account application.
9. The method of claim 8, wherein the instant transaction account code is used to purchase an airline ticket or make a lodging reservation.
10. The method of claim 8, wherein the instant transaction account application contains information received from a database of the partner service provider.
11. The method of claim 8, wherein the instant transaction account application contains information received from the partner service provider or information entered by the applicant.
12. The method of claim 8, wherein the information associated with the rewards program comprises name of the rewards program.
a tangible, non-transitory memory communicating with a processor for issuing a transaction account,
the tangible, non-transitory memory having instructions stored thereon that, in response to execution by the processor, cause the processor to perform operations comprising: receiving, by the processor, an instant transaction account application containing information about an applicant from an airline ticketing agency; developing, by the processor and to control fraud, an instant transaction account authorization decision based at least in part on the instant transaction account application; developing, by the processor and to control fraud, an instant transaction account authorization decision based on tenure of the applicant in a third party rewards program with respect to a transaction account issuer provided by the airline ticketing agency; developing, by the processor and to control fraud, an instant transaction account application authorization decision based on comparing applicant provided instant transaction account application information and information associated with the rewards program; and providing, by the processor, an instant transaction account code in response to the authorization decision indicating approval of the instant transaction account application.
14. The system of claim 13, wherein the instant transaction account code is used to purchase the airline ticket from the airline ticketing agency.
15. The system of claim 13, further comprising offering the instant transaction account to the applicant while the applicant makes a reservation with the airline ticketing agency.
16. The system of claim 13, wherein the instant transaction account application is received from the airline ticketing agency or the instant transaction account application contains information received from the airline ticketing agency.
17. The system of claim 13, further comprising limiting an airline ticket purchased in the applicant's name using the instant transaction account code to not be renamed or resold, such that the name on the ticket can be compared with a name of a passenger if the passenger attempts to use the ticket.
the tangible, non-transitory memory having instructions stored thereon that, in response to execution by the processor, cause the processor to perform operations comprising: receiving, by the processor, an instant transaction account application containing information about an applicant from a partner service provider, wherein the applicant has a party rewards program account sponsored by the partner service provider, wherein the rewards program is a third party rewards program with respect to a transaction account issuer; developing, by the processor, a transaction account authorization decision to control fraud, wherein the transaction account authorization decision is based at least in part on information contained in the instant transaction account application and information associated with the third party rewards program account of the applicant; developing, by the processor, an instant transaction account authorization decision to control fraud, wherein the instant transaction account authorization decision is based on tenure of the applicant in the rewards program sponsored by the partner service provider and providing, by the processor, an instant transaction account code in response to the transaction account authorization decision indicating approval of the instant transaction account application.
19. The system of claim 18, wherein the instant transaction account application contains information received from a database of the partner service provider.
20. The system of claim 18, wherein the information associated with the rewards program comprises a name of the rewards program.
6941279 September 6, 2005 Sullivan
7364073 April 29, 2008 Webb
7575154 August 18, 2009 Rothschild
7953663 May 31, 2011 LeKachman
20020138357 September 26, 2002 Dutta
20040030637 February 12, 2004 Robison et al.
20040073439 April 15, 2004 Shuster
20040158532 August 12, 2004 Breck et al.
20050283435 December 22, 2005 Mobed et al.
Search Report, dated Nov. 28, 2007, for PCT Patent Application No. PCT/US 07/01922, 7 pages.
NZ; Exam Report dated Jun. 29, 2011 in Application No. 593732.
AU; Examination Report dated Oct. 29, 2009 in Application No. 2007208251.
AU; Examination Report dated Feb. 7, 2011 in Application No. 2007208251.
AU; Examination Report dated Dec. 8, 2010 in Application No. 2007208251.
NZ; Examination Report dated Jan. 18, 2010 in Application No. 570617.
NZ; Examination Report dated May 31, 2011 in Application No. 570617.
MX; Office Action dated Mar. 2011 in Application No. MX/a/2008/009619.
GB; Examination Report dated Jul. 14, 2010 in Application No. GB0815082.3.
Canadian Office Action received Mar. 29, 2012 in Application No. 2640136.
International Preliminary Report on Patentability dated Jul. 29, 2009 in Application No. PCT/US2007/001922.
Patent number: 8336764
Filed: Dec 29, 2006
Date of Patent: Dec 25, 2012
Patent Publication Number: 20070174184
Inventors: Stacey J. Crawford (Murray, UT), Danielle M. Crop (Phoenix, AZ), Glade R. Erikson (Glendale, AZ), Kristin H. Gomes (State College, PA), Sejal D. Vora (Scarsdale, NY)
Attorney: Snell & Wilmer L.L.P.
Application Number: 11/618,423
Current U.S. Class: Banking Systems (235/379); Systems Controlled By Data Bearing Records (235/375)