Firms help merchants keep transactions safe.

On a computer monitor in a Calabasas office, Dan Clements points to lines of text originating from a hacker chatroom that include credit card numbers and expiration dates, all obtained illegally.

With three simple keystrokes, Clements can call up another credit card number onto the screen. And then another. And then another.

"We grab those numbers in real time," said Clements, chief executive officer of Card Cops, a data collection company. "When a merchant runs that number when they get an order and it comes up, the number will be redflagged."

And that is how Clements and Steve Peisner, president of SellitSAFE.com are working together to protect merchants from identity thieves who fraudulently use credit cards to rack up charges that the merchants are responsible for.

That merchants must pay chargebacks of up to $25 per fraudulent transaction is an under-reported aspect of identity theft, Peisner said.

"There is no financial loss to (the consumer)," Peisner said. "The loss is borne by the merchant."

The Federal Trade Commission reported in January that out of 685,000 consumer complaints filed in 2005 with the agency, 255,000 were related to identity theft. That

was an increase of more than 40,000 complaints from 2003.

Internet-related complaints overall comprised 46 percent of the total complaints received by the agency for 2005.

There is a riddle that Peisner likes to say around the office space shared by Card Cops and SellitSAFE.com: when is a consumer not a consumer?

"When he's a merchant," Peisner answers. "A business owner who is at home has the same rights as any other consumer. But between 8 and 5, those same rights as a consumer are given away for anyone who shops at their business."

SellitSAFE.com has been in business for one year, slowly growing its base one client at a time through word of mouth and referrals, Peisner said.

The "spark" for the company came from knowing that merchants lacked protection as the number of identity theft cases rose, said Peisner, a member of the risk and fraud committee of the Electronic Transactions Association.

Card Cops provides the data to SellitSAFE then makes available to the merchant clients who are charged $10 a month and 10 cents per transaction.

The nice thing about the service is that it is automated and piggybacks on an existing address verification system a merchant may use, said Card Cops President Michael Brown.

But for SellitSAFE.com to work, a few merchants do have to take a financial hit so that it becomes known when a credit card number has been stolen, Brown said.

"Where we come in is we can stop those initial hits from happening," Brown said.

Card Cops can come across 5,000 to 10,000 stolen credit card numbers a day from hacker chatrooms, webboards and websites, Clements said.

Because so many of the hackers trading or selling the information are in foreign countries, they are beyond the reach of the FBI and U.S. Secret Service and so difficult to shut down, Clements added.

But while Peisner cautions that he cannot guarantee that a merchant will not use a fraudulent credit card by checking with SellitSAFE.com, the chances of risking chargebacks fees does decrease.

"We don't make the Internet a safe place to shop," Peisner said. "We make it a safe place to sell."