System and Method for Early Detection of Fraudulent Transactions

#A payment processing network can refer to a network that performs transaction processing such as payment processing for credit and debit card payments. Payment authentication and verification are primary functions of a payment processing network. In many instances, a payment processing network structure only allows short periods of time for completing an authorization in a context where large numbers of transactions are being processed on a continuous basis. In spite of these demands, the increasing functionality and performance of computing systems may allow added functionality or support for other priorities within a payment processing network. Fraud detection and messaging are two potential examples of additional functionality.

#Alert messages can be derived from the inherent information in each transaction and other customization settings. Alert messages provide a means of notifying a user about recent transactions and/or account activities in a tailored format. Such alerts may be in the form of messages tailored based on various metrics. These metrics may specify the type of information a user wants to see such as recent transactions, account balances, transaction amounts over specified pre-set limits, and/or a format of the alerts which may specify the language, amount of detail, and the type of user devices used to receive the messages, among others.

#Additionally, a major source of inefficiency and loss within a payment processing network is from fraud where a number, identity, or other information that may be used to initiate and complete a transaction is misappropriated. Because of the time and processing resource limitations mentioned above, a payment processing network has a limited opportunity to be involved in detection of fraudulent transactions, while at the same time being positioned to have important and early information that may be related to fraud detection. Although some methods of detecting fraud exist, theft and fraud in payment transactions continues to occur at a rate that reaches into the hundreds of millions and billions of dollars per year.

#FIG. 1 shows a system, according to an embodiments of the innovations presented herein.

#FIG. 2a illustrates an example of an alert message, according to an embodiment of the innovations presented herein.

#FIG. 2b illustrates an example of an alert message, according to an embodiment of the innovations presented herein.

#Embodiments of the innovations disclosed herein include systems and methods for using alert messages in identifying and preventing possible fraudulent transactions.

#In one non-limiting embodiment, a user registers for an alert system, and associates a credit card with a cell phone. During or just after a transaction involving the credit card, a risk engine sends a message to the cell phone asking the user to respond if they do not recognize the transaction. If the user does respond to indicate a fraudulent transaction, the risk engine is updated using the response to predict potential future fraud. The risk system may use the response or related data to identify locations, groups of similar users, types of merchants, or other patterns that may be used to predict potential future fraud. In some circumstances, messages may be sent to users, merchants, or issuers with an indication that certain types of fraud may be expected based on analysis from a risk engine.

#In further embodiments, alert messages to third parties may be incorporated into the system. The associated replies from third parties may be incorporated into the risk engine for increasing a risk associated with a particular user. A third party reply may also be used to increase a priority related to allocating resources attempting to contact a user and to increase resources allocated to analyzing similar or related transactions.