Travel Org. Fights E-Fraud

<B>Travel Org. Fights E-Fraud</B>

Expedia.com and Starwood Hotels joined American Express, First Data Corp. and Paymentech, among others, in forming the Worldwide E-Commerce Fraud Prevention Network (www.merchantfraudsquad.com), an industry coalition designed to reduce Web-based fraud.

American Express conceived the idea in early 2000 and hosted its first seminar Sept. 25 to share fraud prevention information and best practices with merchants of all sizes to improve Web security and decrease the costs of fraud. Merchants often bear these costs when stolen cards are used to purchase goods on their sites. Back in March, for example, Expedia was forced to set aside a reserve of $4 million to $6 million--the company's estimate of unreserved fraudulent activity to date. Expedia and federal law enforcement agencies investigated fraud by criminals who used stolen credit cards to purchase travel online.

To promote increased security, the Network will hold workshops and may host a fraud prevention summit next year. It has hired Gartner Group to research current and future fraud prevention solutions. The Network also expects to partner with consumer groups, law enforcement, better business bureaus and other fraud prevention groups to provide information and encourage best practices.

American Express is funding the Network during its first year; the other founding members will provide the resources moving forward. Thanks to that support, the Network will be capable of offering a free charter membership to any organization or business interested in fighting Internet fraud that meets certain best-practice requirements.

"As Starwood pursues our goal of becoming the dominant hospitality player in the e-commerce arena, we are determined to ensure that our customers worldwide are protected from online fraud," said Steve Hankin, president of Starwood technology and revenue systems.