Patent ID: 7386510

Claim:
A method of detecting fraudulent activity related to a credit card account prior to authorizing the credit card account, the method comprising: a) receiving at a communication receiving center, via a telephone call from a person purporting to be a merchant, an authorization request to charge a credit card account for a certain dollar amount, wherein the authorization request includes merchant information and call detail information used to identify the merchant purportedly making the authorization request; b) providing a computer system having a database of transaction data used to identify legitimate merchants that are authorized to conduct financial transactions; c) transmitting the merchant information and the call detail information received at the communication receiving center to the computer system; d) performing one or more circumstantial checks on the authorization request at least in part by comparing the merchant information and the call detail information with the transaction data in the database; e) computing, based on the results of the checks, an estimate of the likelihood that the call does not originate from a legitimate merchant; f) comparing the resulting estimate with a predetermined threshold; g) determining if the estimate exceeds the predetermined threshold; and h) based upon the determination that the resulting estimate exceeds the predetermined threshold, producing a record of the authorization request and information indicating that the person was not authorized to conduct financial transactions and that the credit card account is likely to be a stolen or generated credit card account; wherein steps d) through h) are performed by the computer system.