AVS Mismatch

Person entering credit card information online_CardinalCommerceWhen a consumer provides a billing address during checkout that does not match the address on file with the card-issuing bank or credit card company, this is called an AVS mismatch error. An address verification service (AVS) is used to protect consumers and merchants from credit card fraud. Consumers can avoid AVS mismatch errors by ensuring that addresses provided at checkout match the addresses printed on their credit card statement. Resolving AVS mismatch errors often require consumers to contact their bank or card issuer. These errors can be a hassle, as they often result in the bank putting a hold on the funds for 2-3 business days while the discrepancy is sorted out.

Preventing Fraud with Address Verification Services

The idea behind address verification services is that they should help prevent Card-Not-Present (CNP) Fraud. A system that cross references the numeric portions of an address presented by a consumer at checkout with the numeric portion of the billing address on file with the card issuer was thought to be a practical way for merchants to verify the person with the card is the rightful owner of the card. AVS filters can be turned on and off, and while the merchants are encouraged by payment processors to always have them on, they do not realize that these filters neither ensure the transaction is valid nor prove it is fraudulent. To be effective, AVS filters must be used as just one of a comprehensive set of tools to combat fraudulent transactions.

Not Every AVS Mismatch is a Fraudulent Transaction

One of the downsides of address verification services is they are not supported outside of the U.S., U.K., and Canada. Thus, the address provided by consumers who have cards outside of these countries cannot be used to verify it. Merchants should also realize that even on cards issued in these three countries, an AVS mismatch does not equal a fraudulent transaction. Consumers who have recently been associated with their parents’ address but have moved, consumers who have multiple cards and don’t remember the address associated with each, or consumers who have a billing and shipping address and misunderstand which is being asked for are all examples of an AVS mismatch where fraud is not involved.

Not Every AVS Match is a Legitimate Transaction

In dark places on the Internet where criminals like to hang out, house numbers and zip codes associated with a card are often provided with the card number and owner’s name. This gives fraudsters and identity thieves what they need to avoid an AVS mismatch and perpetrate fraud. These criminals have come to learn that shipping addresses which are far away from the billing address raise red flags that can cause the transaction to be recognized as fraudulent. The workaround they use is to find a place to pick up the package where the address includes both the same house number and the same ZIP code. Card holders who reside in densely populated areas are especially vulnerable to this kind of fraud, as there are multiple options for drop off points in a large city as opposed to a rural community. But this is just one example of how an AVS match could still end up being a case of fraud.    

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