Visa International says it is getting a handle on one of the industry's most difficult and persistent problems - credit card counterfeiting.

In April 1993, the San Francisco-based association launched Card Verification Value, or CW, a code that is embedded in the magnetic stripe of a credit card and is used to indicate whether a card is valid or has been tampered with.

Visa said its global counterfeit losses grew just 7% in 1993 to $150 million down sharply from growth of 62% in 1992 and 99% in 1991.

Visa counterfeit losses in the United States increased 19.1% in 1993, indicating that international efforts were especially significant in bringing down the overall losses.

From July 1993 through January 1994, the most recent available data, Visa's counterfeit figures have gone down each month when compared with the same month the previous year, a spokesman said last week.

Alan Welch, senior vice president of risk management at Wachovia Corp., concurred with Visa's report, saying July was the pivotal month in the fight against counterfeiting.

"From July on we began to have a good experience in controlling our counterfeit losses, particularly the average amount lost per card," said Mr. Welch.

Wachovia, which encoded its cards with CVV long before April 1993, began authorizing sales in July using the CVV information.

Mr. Welch believes Wachovia's counterfeit losses, which totaled $100,000 in 1992 and tripled in 1993, would have been twice as large in 1993 if CVV and another Visa risk control program called Payment Service 2000 had not been in place.

MasterCard Growth at 75%

MasterCard International Inc. implemented a similar program, called Card Verification Code, worldwide last month. The year's lag behind Visa's CW explains MasterCard's 75% increase in counterfeit losses in 1993, to $134 million.

The two associations' combined counterfeit losses accounted for about 25% of their $1.13 billion in total fraud.

MasterCard reported declines in other major categories of fraud in 1993. Visa's New Yorkbased competitor maintains that criminals turned to counterfeiting because they have been thwarted by MasterCard's aggressive efforts in fighting other types of fraud.

Both CVV and CVC were piloted in the Asia-Pacific region, where counterfeiting was particularly acute. Asia-Pacific is the only territory in which Visa mandates the use of CW.

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