Third-party verification


Third-party verification

TPV (Third party verification) is a process of getting an independent party to confirm that the customer is actually requesting a change or ordering a new service or product. By putting the customer on the phone (usually via transfer or 3-way call) TPV provider asks a customer for his identity, that he is an authorized decision maker and to confirm his order.

Who uses

Long Distance Providers, Telemarketing Companies are required by law to use a Third Party Verification service while selling products or services over the phone or they may face substantial penalties or criminal sanction. Merchants who take Electronic Check payments over the phone are required to receive either written or voice recorded authorizations. Or anyone else who wants to have a Third Party Verification Record or Verbal Contract to fall back on when fighting chargeback or billing dispute.

It is also used where a signed contract is not easily obtained. This can include individuals at a distance, such as: military personnel stationed overseas; parental approval for school programs or projects; condo association votes; next of kin authorizations; emergency permissions. The kinds of organizations using it now routinely include: Local Governments, Insurance Companies, Lawyers, Appointment Setting, Schools and Universities, Utility Companies, Telecom Companies, Internet Service Providers, Security Companies, Auto Dealers Service Departments, Summer Camps, Healthcare & Hospitals, Real Estate, Travel & Vacation, and many more.

A TPV provider allows companies to prove that a consumer agreed to almost any kind of sale or other transaction, using either email or telephone or both, and obtain a legally binding instrument in the process.

TPV is required

TPV is required or authorized by the Federal Trade Commission [http://www.ftc.gov/os/2002/12/tsrfinalrule.pdf] and the Federal Communications Commission, and most state's Public Utility or Public Services Commissions for telecom service changes and by many states for changes in electric and natural gas service.

In addition, the FTC requires a process similar to TPV for many orders and we have many clients who use TPV to have reliable documentation of their orders, and other transaction types. Third-Party Verification is now the defacto standard for transactions of all types where a legally binding authentication and confirmation are required, but a signed document is impractical or impossible. It is being applied in hospitals and else where in healthcare for records releases; in schools for parental program approvals; by local governments as notification of impending actions; by attorneys themselves for service authorizations; by service providers for work authorizations. In all cases, based upon Federal Rules and the U.S.Code, phone verifications are authorized and legally binding, assuming that the verification is recorded and available for audit for a minimum of 24 months, and that identity of the authroizing person can reasonably be verified, such as by a social security number, driver's license, date of birth, and/or other unique identifiers.

In the telecommunications industry, under new rules VoIP carriers who connect with the public telephone network are required notify their customers of any limitations to their E911 (enhanced 911) service, including where and under what conditions it may not be available, including: in the event of a loss of internet connection, or loss of power. Importantly, VoIP carriers must also obtain "affirmative acknowledgement" from every customer that they have received and understood that information.

Thus phone verification fills the demand for legal authentication of documents, consumer intent, and provides substantial fraud prevention.

Advantages of using

Third Party Verification adds an important element of proof to electronic transactions. For example, in a just-completed experimental study of consumer reactions to electronic contracts, over 80% of respondents agreed that a transaction was harder to dispute because the verification was made and held by an independent third party.

At present time TPV elements are used in complex verification and approve of different web transactions in conjunction with Address Verification System, IP Geolocation, phone type identifying (land line, mobile, VoIP etc). According to Paul Heyward, head of IT (Proveout.com [http://www.proveout.com] ): "Online fraud is a common headache for vast majority of companies accepting credit/debit cards payments. Such services can significantly ease Merchant's and Webmaster's everyday work and essentially minimize fraud's possibility".


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