Re: [registrars] RE: Credit Card Proposal

["Paul M. Kane" <Paul.Kane@REACTO.com>]

Michael D. Palage wrote:

> The one thing I took out of the FTC meeting last week, is that the FTC is
> looking for people to help them catch the bad guys.

That was the surface message.  The deeper message and real "risk" to 
Registrars (in the USA) is that Registrars shall be _obligated_ to 
verify the identity of the registrant before processing the 
registration.  How - they did not discuss - but the costs they implied 
should be bourne by the Registrar - In a market where margins are 
already tight - such costs will push the registry registration fee into 
insignificance. One presenter suggested it took between 2 and 3 man 
hours per registraiton to validate an address!!!

  I believe tackling the
> credit card problem needs to be done through multiple channels: registrars
> employing available safeguards, law enforcement trying to catch the bad
> people, and registries helping us with the credit card charge back issue.

I don't know if you were there on the Wednesday Mike, but the guys from 
the Credit Card companies made it clear- they are not in the business of 
sharing information - even  if it means the disclosure of stolen/invalid 
  cards.  They inferred that there were approx 190m chargebacks in 
Canada and the USA last year and at a charge back rate (levied on the 
merchant) of between $15 and $25 per chargeback - the banks were not 
going to spend money (unless pushed by the FTC) to change their business 
(profit) making practices.


> This is a problem which needs collective help.

I agree and one significant step is for the FTC to pressure the Banking 
institutions (which really means Visa/MCard and Discovery) to sharpen up 
their act and work collectively (to assist the merchants) catch the bad 
guys.

Another useless statistic - but not irrelevant - Credit Card Processors 
(Banks) have reduced their fraud losses from 20c/$100 to 7c/$100 in the 
last 3 years.  When fraud has been rising - this really means that the 
Credit Card Merchant has been the guarantor for the Banks.

IMHO it is better to pressure the FTC into action on the Banks - than 
take the easy route by rolling over and paying the price....

Best

Paul