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Most chargebacks come through the processor with a response of "cardholder not present", that means that at the time of the credit card charge, the cardholder did not have possession of the card...if he did not have the card, then he could not have made the charge
Because all the processor has is information such as name, address, IP, ect, there is no concrete proof that the person responsible for the charge actually did it. Unless proof such as a signature, pin code (Debit cards) can show that the cardholder was there (which cannot be done), then the bank will accept the chargeback.
With the new CVV2 on all cards, those chargebacks will be easier to fight. CVV2 numbers are extra codes on the card and cannot be stored anywhere; they are being phased in right now(right now they are being used as a supplement for fraud protection, if the code is correct, then it the charge gets assigned a better fraud score). Credit card numbers/expiration dates can be held, traded, etc. With CVV2, you need to know the correct code on the card to make the transaction. You pass the code on in the signup form, the processor gets a response from the issuing bank that tells them whether the code was correct or not, and that?s it. The CVV2 code is not stored anywhere, just used for the initial authorization. Rebills are all done with the card # and expiration date. That prevents those codes to be associated with the corresponding card. If somebody manages to steal or break into a credit card database, then they will not know the CVV2 codes for the cards?
I do not know much about electronic signatures, if they would be hard to steal/duplicate, then they might work. Really, the question isn?t whether we think it would work or not to prevent fraud, it is whether the banks would accept them as the proof they need
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