Third-party verification (TPV) is a process of getting an independent party to confirm that the
customer
In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...
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) the TPV provider asks a customer for his or her identity, that he or she is an authorized decision maker and to confirm the order.
Who uses
In many parts of the world, especially the United States, long distance providers,
telemarketing
Telemarketing (sometimes known as inside sales, or telesales in the UK and Ireland) is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequent f ...
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 third-party companies, lawyers, appointment setting, schools and universities, utility companies, telecom companies,
Internet service provider
An Internet service provider (ISP) is an organization that provides services for accessing, using, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise private ...
s, security companies, auto dealers service departments, summer camps, healthcare and hospitals, real estate, travel and 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
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
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 to have reliable
documentation
Documentation is any communicable material that is used to describe, explain or instruct regarding some attributes of an object, system or procedure, such as its parts, assembly, installation, maintenance and use. As a form of knowledge manageme ...
of their orders, and other transaction types. Third-party verification is now the de facto 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 authorizing person can reasonably be verified, such as by a social security number, driver's license, date of birth or other unique identifiers.
In the telecommunications industry, under new rules, VoIP carriers who connect with the public telephone network are required to notify their customers of any limitations to their
E911
Enhanced 911, E-911 or E911 is a system used in North America to automatically provide the caller's location to 911 dispatchers. 911 is the universal emergency telephone number in the region. In the European Union, a similar system exists known as ...
(enhanced 911) service, including where and under what conditions it may not be available, such as 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.
However, the actual telemarketing sales calls leading to third-party verification are typically not retained. Given this, marketing abuses are often difficult to identify, even with the use of third-party verification.
Currently, TPV elements are used in complex verification and approval of different web transactions in conjunction with
address verification service
address verification service (AVS) is a service provided by major credit card processors to enable merchants to authenticate ownership of a credit or debit card used by a customer. AVS is done as part of the merchant's request for authorization ...
s provided by credit card companies,
IP geolocation, phone type identifying (land line, mobile,
VoIP
Voice over Internet Protocol (VoIP), also called IP telephony, is a method and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet. The terms Internet t ...
etc.).
References
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Telemarketing