Study Guide

PayPal Certified Developer Program Study Guide March 2008 37
Internet Security and Fraud Prevention
Review Questions
2
z Extra security measure. At checkout, customers are required to enter a password to verify
their identity with their credit card company.
z Maximum protection. Once the cardholder’s password is authenticated, Visa and
MasterCard cover the merchant’s liability for that transaction.
Review Questions
Answers to review questions are in Appendix A, “Answers to Review Questions.”
1. Indicate if each statement is True (T) or False (F).
_____ Every merchant is at risk for fraud.
_____ Internet fraud is as easy to detect as in the brick-and-mortar world.
_____ Credit card associations hold merchants liable for fraudulent transactions because
the credit card is not physically present during online purchases.
_____ American Express, Diners Club, Discover Card, JCB, MasterCard International, and
Visa U.S.A. have adopted the Payment Card Industry (PCI) Data Security Standard
developed to protect account and transaction information of cardholders.
_____ According to Gartner Group estimates, merchants reject an estimated 2% of all
transactions out of suspicion of fraud, while in reality, 5% of transactions are
actually fraudulent.
2. List the four most common fraud-related risks facing online merchants.
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