Note: Descriptions are shown in the official language in which they were submitted.
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WEB-BASED ACCOUNT MANAGEMENT
BACKGROUND OF THE INVENTION
The present invention relates to an account management
system for Internet commerce applications and, more particularly,
to a system for qualifying over the Internet a participant in a
trans action.
An unfortunate result of the increasing market in electronic
commerce over the Internet is the increasing occurrences of fraud
and/or abuse. Such abuse has been particularly evident on Internet
auction sites, of which there are over 1,000 currently operating
today. A majority of the abuse has been either individuals bidding
on items for sale without the intention of ever taking possession of
the items or individuals who intentionally bid on items with the
intention of taking possession of the items without paying for
them.
It would thus be desirable to provide an intermediary or
third-party participant that can provide an Internet account/credit
management system to eliminate the potential for fraud or abuse.
Such a system should be able to determine with some certainty that
the individual who has registered on the site has funds available,
which can be reserved as a deposit for the item or to cover the cost
of the item if the bidder submits a winning bid. It would also be
desirable for the system to enable funds to be transferred between
bidder and seller accounts at settlement.
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SUMMARY OF THE INVENTION
The system according to the present invention enables an
auction company to provide a secure way of preventing fraudulent
bidding and preventing participation by bidders that fail to settle
after winning an auction. The system is preferably an Internet web
site that serves to electronically transact the acceptance and
verification of deposits from multiple auctions or transactions and
participants simultaneously. The system provides an easy to use
and efficient method for minimizing fraudulent bidding in multiple
auctions simultaneously while being capable of providing insured
(such as FDIC) interest bearing deposits held for bidders. The
system incorporates a secure web site capable of communicating
with numerous auction entities and tracking multiple deposit
accounts for.participants in a commerce environment
simultaneously.
Participants are required to establish a deposit or margin
account, a so-called bidder funding account, prior to their being
able to bid. When the bidder places a bid, the auction venue
computer queries the system to determine whether the bidder has
an account. If not, the bidder is provided an opportunity to sign up
for an account.
When listing an asset for sale, a seller is prompted to
indicate whether a bid deposit is required, and if so, the amount of
the required deposit. The sellers or the auction venue determine
the amount of the deposit according to various factors, including
the fact that higher deposit amounts result in a smaller number of
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qualified bidders, but also result in more qualified bidders.
Moreover, the seller or the auction venue considers what amount
of money would adequately compensate the seller in the event that
the bidder does not complete settlement. A suggested deposit
amount may also be calculated automatically.
If a deposit is required to participate in the auction, the
auction venue transmits information to the deposit system relating
to the amount of a required deposit. The system then puts a
deposit hold on the bidder's bidder funding account for the amount
of that auction's deposit.
During the auction, if the bidder is a high bidder, the amount
of the actual bid is alternatively or additionally held or reserved in
the bidder's bidder funding account. The deposit hold or bid hold
is only in place as long as the bidder is the high bidder. The holds
are released in the event that the bidder is no longer the high
bidder. Each time the bidder is a high bidder in a particular
auction, a deposit hold is placed on the bidder's bidder funding
account along with the bid hold, allowing the bidder the ability to
bid on multiple auctions requiring deposit holds simultaneously up
to the available balance of the bidder funding account. Preferably,
the bidder's deposit holds cannot exceed a balance in the bidder's
bidder funding account.
In accordance with an exemplary embodiment of the
invention, a method of qualifying a bidder over a global network
for an auction includes the steps of (a) establishing a bidder
funding account, (b) reserving a portion of the bidder funding
account according to a bid submitted by the bidder, and (c)
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releasing the reserved portion of the bidder funding account if the
bid is not a high bid. Step (b) may be practiced by reserving an
amount of the bidder funding account corresponding to the bid
submitted by the bidder. In this context, the method may further
include transferring the reserved portion when settlement is
complete. Subsequently, the method may include releasing the
reserved portion of the bidder funding account.
The amount reserved ma.y correspond to a deposit amount
required by the seller or the auction venue. In this context, step (b)
may be further practiced by reserving an amount of the bidder
funding account corresponding to the bid submitted by the bidder
in addition to the deposit amount. The deposit amount may be
transferred to the seller if the bid is a winning bid and the bidder
does not complete settlement.
In one mode of operation, the step of establishing a bidder
funding account includes depositing funds in the bidder funding
account. In this context, step (a) may be further practiced by
paying interest on the funds deposited in the bidder funding
account. Alternatively, the step of establishing a bidder funding
account may be practiced by establishing a line of available credit.
If after step (c), the bidder resubmits a bid, the system
preferably repeats step (b) by reserving a portion of the bidder
funding account according to the bid submitted by the bidder.
In accordance with another exemplary embodiment of the
invention, a method of qualifying a bidder over a global network
for an auction includes the steps of (a) determining whether a
deposit is required to participate in the auction, and if so,
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determining an amount of the deposit; (b) receiving a bid inquiry
from the bidder and determining whether the bidder has
established a bidder funding account, wherein (b1) if the bidder
has not established the bidder funding account, enabling the bidder
5 to establish the bidder funding account, and (b2) if the bidder has
established the bidder funding account, accessing the bidder's
bidder funding account; and (c) qualifying the bidder according to
a balance in the bidder funding account.
If a deposit is required according to step (a), step (c) is
practiced by reserving a first portion of the bidder funding account
corresponding to an amount of the deposit. Step (c) is preferably
further practiced by reserving a second portion of the bidder
funding account corresponding to an amount of the bid. In this
context, the method includes transferring at least the second
portion when settlement is complete and releasing the reserved
first and second portions of the bidder funding account. If a
deposit is required according to step (a), step (c) may be further
practiced by transferring the first portion of the bidder funding
account if the bid inquiry becomes a winning bid and the bidder
does not complete settlement.
Step (c) may be practiced by qualifying he bidder according
to an amount of unreserved funds deposited in the bidder funding
account. Alternatively, step (c) may be practiced by qualifying the
bidder according to an amount of unreserved credit in the bidder
funding account.
In accordance with still another exemplary embodiment of
the invention, a computer system for effecting qualifying of a
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bidder in an auction is provided. The computer system includes at
least one user computer running a computer program that requests
information according to a bid inquiry input by a bidder. The
computer system also includes a system server running a server
program, wherein the at least one user computer and the system
server are interconnected by a computer network. The system
server determines whether the bidder has established a bidder
funding account. If the bidder has not established the bidder
funding account, the system server sends information to enable the
bidder to establish the bidder funding account. If the bidder has
established the bidder funding account, the system server accesses
the bidder's bidder funding account and qualifies the bidder
according to a balance in the bidder funding account.
In accordance with still another exemplary embodiment of
the invention, a computer program embodied on a computer-
readable medium is provided for qualifying a bidder over a global
network for an auction.
BRIEF DESCRIPTION OF THE DRAWINGS
These and other aspects and advantages of the present
invention will be described in detail with reference to the
accompanying drawings, in which:
FIGURE 1 is a detailed schematic illustration of a computer
system;
FIGURE 2 illustrates the system environment and
application;
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FIGURE 3 illustrates the site architecture according to the
present invention; and
FIGURE 4 is a flow diagram illustrating an auction process
incorporating the system of the present invention.
DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS
The account management system implemented in the
diagrams of FIGURES 2-4 is preferably a browser-based system in
which a program running on a user's computer (the user's web
browser) requests information from a server program running on a
system server. The system server sends the requested data back to
the browser program and the browser program then interprets and
displays the data on the user's computer screen. The process is as
follows:
1. The user 1-uns a web browser program on his/her
computer.
2. The user connects to the server computer (e.g., via the
Internet). Connection to the server computer may be conditioned
upon the correct entry of a password as is well known.
3. The user requests a page from the server computer.
The user's browser sends a message to the server computer that
includes the following:
the transfer protocol (e.g., http://); and
the address, or Uniform Resource Locator (URL).
4. The server computer receives the user's request and
retrieves the requested page, which is composed, for example, in
HTML (Hypertext Markup Language).
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g
5. The server then transmits the requested page to the
user's computer.
6. The user's browser program receives the HTML text
and displays its interpretation of the requested page.
Thus, the browser program on the user's computer sends
requests and receives the data needed to display the HTML page
on the user's computer screen. This includes the HTML file itself
plus any graphic, sound and/or video files mentioned in it. Once
the data is retrieved, the browser formats the data and displays the
data on the user's computer screen. Helper applications, plug-ins,
and enhancements such as JavaTM enable the browser, among other
things, to play sound and/or display video inserted in the HTML
file. The fonts installed on the user's computer and the display
preferences in the browser used by the user determine how the text
is formatted.
If the user has requested an action that requires running a
program (e.g., a search), the server loads and runs the program.
This process usually creates a custom HTML page "on the fly" that
contains the results of the program's action (e.g., the search
results), and then sends those results back to the browser.
Browser programs suitable for use in connection with the
account management system of the present invention include
Netscape~ Navigator available from Netscape~ Communications
Corporation and Internet Explorer available from Microsoft~
Corp.
While the above description contemplates that each user has
a computer running a web browser, it will be appreciated that more
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than one user could use a particular computer terminal or that a
"kiosk" at a central location (e.g., a cafeteria, a break area, etc.)
with access to the system server could be provided.
It will be recognized by those in the art that various tools are
readily available to create web pages for accessing data stored on a
server and that such tools may be used to develop and implement
the account management system described below and illustrated in
the accompanying drawings.
FIGURE 1 generally illustrates a computer system 201
suitable for use as the client and server components of the account
management system. It will be appreciated that the client and
server computers will run appropriate software and that the client
and server computers may be somewhat differently configured
with respect to the processing power of their respective processors
and with respect to the amount of memory used. Computer system
201 includes a processing unit 203 and a system memory 205. A
system bus 207 couples various system components including
system memory 205 to processing unit 203. System bus 207 may
be any of several types of bus structures including a memory bus
or memory controller, a peripheral bus, and a local bus using any
of a variety of bus architectures. System memory 205 includes
read only memory (ROM) 252 and random access memory (RAM)
254. A basic input/output system (BIOS) 256, containing the basic
routines that help to transfer information between elements within
computer system 201, such as during start-up, is stored in ROM
252. Computer system 201 further includes various drives and
associated computer-readable media. A hard disk drive 209 reads
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from and writes to a (typically fixed) magnetic hard disk 211; a
magnetic disk drive 213 reads from and writes to a removable
"floppy" or other magnetic disk 215; and an optical disk drive 217
reads from and, in some configurations, writes to a removable
5 optical disk 219 such as a CD ROM or other optical media. Hard
disk drive 209, magnetic disk drive 213, and optical disk drive 217
are connected to system bus 207 by a hard disk drive interface 221,
a magnetic disk drive interface 223, and an optical drive interface
225, respectively. The drives and their associated computer-
10 readable media provide nonvolatile storage of computer-readable
instructions, SQL-based procedures, data structures, program
modules, and other data for computer system 201. In other
configurations, other types of computer-readable media that can
store data that is accessible by a computer (e.g., magnetic cassettes,
flash memory cards, digital video disks, Bernoulli cartridges,
random access memories (RAMS), read only memories (ROMs)
and the like) may also be used.
A number of program modules may be stored on the hard
disk 211, removable magnetic disk 215, optical disk 219 and/or
ROM 252 and/or RAM 254 of the system memory 205. Such
program modules may include an operating system providing
graphics and sound APIs, one or more application programs, other
program modules, and program data. A user may enter commands
and information into computer system 201 through input devices
such as a keyboard 227 and a pointing device 229. Other input
devices may include a microphone, joystick, game controller,
satellite dish, scanner, or the like. These and other input devices
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are often connected to the processing unit 203 through a serial port
interface 231 that is coupled to the system bus 207, but may be
connected by other interfaces, such as a parallel port interface or a
universal serial bus (USB). A monitor 233 or other type of display
device is also connected to system bus 207 via an interface, such as
a video adapter 235.
The computer system 201 may also include a modem 254 or
other means for establishing communications over the wide area
network 252, such as the Internet. The modem 254, which may be
internal or external, is connected to the system bus 207 via the
serial port interface 231. A network interface 256 may also be
provided for allowing the computer system 201 to communicate
with a remote computing device 250 via a local area network 258
(or such communication may be via the wide area network 252 or
other communications path such as dial-up or other
communications means). The computer system 201 will typically
include other peripheral output devices, such as printers and other
standard peripheral devices.
As will be understood by those familiar with web-based
forms and screens, users may make menu selections by pointing-
and-clicking using a mouse, trackball or other pointing device, or
by using the TAB and ENTER keys on a keyboard. For example,
menu selections may be highlighted by positioning the cursor on
the selections using a mouse or by using the TAB key. The mouse
may be left-clicked to select the selection or the ENTER key may
be pressed. Other selection mechanisms including voice-
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recognition systems, touch-sensitive screens, etc. may be used and
the invention is not limited in this respect.
The site architecture and system method will be described
with reference to FIGURES 2-4. Generally, an auction company
or Internet auction venue can implement the system according to
the present invention to require its users (i.e., bidders and sellers)
to establish a management account, a so-called bidder funding
account, and process all auctions through the system according to
the present invention. As shown in FIGURE 2, the eDEPOSITTM
system of the invention serves as an intermediary between sellers
and bidders participating in an auction over the Internet, and
between the Internet auction site and the participants (sellers and
bidders) in an auction. The system establishes and maintains
bidder funding accounts to ensure sellers that bidder funds are
available for any required deposits and bid amounts. The Internet
auction site enlists the system to require bidders to maintain a
bidder funding account, and the system tracks each bid of every
auction simultaneously.
The process of establishing an account will be described
with reference to FIGURE 3. At the system home page 12, the
user can access a loginlset-up area 14, a Frequently Asked
Questions area 16, a User Guide 18, or an informational area
including company information 20, Customer Service 22 and a
Help area 24.
Account maintenance and set-up are effected via the link at
14. To establish an account, the user is prompted to complete a
registration form via a link 26. The registration form will include
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personal and financial information about the user including, for
example, name, address, phone number, e-mail address, social
security number, etc. Once completed, the user selects a user ID
and password and is assigned an account number. The link 26 can
also be accessed to enable the user to edit the user profile.
The user can deposit funds via a link 28 by any suitable
means, including cashier's/certified check, online check, virtual
check, credit card payment, bank wire, e-mail or the like. Funds
are deposited into a system server bank account (such as an insured
account) and tracked through the server database. Users can track
and monitor their account at any time via a link 30 to determine an
amount of interest earned or the status of holds on the account. All
such holds or reservations are effected via the system computer
and do not affect the interest rates for each account. Bidders may
deposit or withdraw their money at any time but may only
withdraw up to the non-held amounts in the account. Withdrawal
requests are made via a link 32. Bidders may also have the option
of designating funds for certificates of deposits, where they agree
to keep their funds in the account for a specified period of time for
specific rates of return.
A balance in the bidder funding account can be an amount of
unreserved funds deposited in the bidder funding account and/or an
amount of unreserved credit in the bidder funding account
according to an approved line of credit provided to the user. In this
context, portions of a credit line are reserved via an "authorization
hold," which is enabled according to known credit card-type
issuers and processors. The authorization hold may draw on the
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credit line when an auction is complete or, when a deposit is
required, when the bidder does not complete settlement after being
a high bidder. The authorization hold serves to reserve a portion of
the credit line. When the bidder is no longer the high bidder, the
authorization hold is released. The authorization hold can also act
as an escrow service to hold transfer of funds until the items
ordered have been accepted or delivered to the bidder.
The line of credit function can be effected via a bank card
issuing company that currently provides credit such as through the
Internet or by the system source. The system, through a link with
the bank card issuing company, can determine if the credit line is
sufficient to place an authorization hold on the line of credit and to
reverse the authorization hold when the line of credit is not needed.
An auction venue (or other business that requires a deposit) will
identify the system according to the invention as a provider of a
credit facility to qualify registered bidders to enable the bidder to
leave a deposit when the selling party in an auction transaction
requires one.
Registered bidders apply for the credit facility just as they
would apply for a credit card, but through the bank card issuing
companies. Just as with applying for a credit card, the applicant
may request a line of credit, and the issuing company, based on the
credit-worthiness of the applicant, can either issue that line of
credit or reject the requested line of credit and issue either a lesser
amount or none at all. The credit line determination can be
immediate, and if accepted, the registered bidder would
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immediately receive an identification number with or without an
actual system credit card.
If the registered bidder bids on an item requiring a deposit,
the bidder is prompted to enter an identification number at the
5 participating auction site, and through the system, it is determined
if the deposit amount is available on the bidder's credit line. If so,
the system requests an authorization hold on their credit line. If
the bidder is not the high bidder, the authorization hold is released.
If the bidder wins the auction, the funds can be transferred through
10 the bank card issuing company and charged to the bidder according
to a user agreement or according to another preset billing
procedure.
An auction process including an implementation of the
present invention will be described with reference to FIGURE 4.
15 Although the invention is described in accordance with an
application to an auction process, the system could readily be
implemented into any transaction where qualification is desirable.
Thus, the term "auction" as used herein means any transaction
between patties where qualification of one or more of the parties is
desirable. In this context, the term "bidder" as used herein refers to
any participant in the transaction that is being qualified with the
system according to the invention, including, but not limited to,
buyers, sellers, vendors, service providers, and the like.
A bid is initially placed by a bidder at an auction venue in
step S 1. If the auction venue does not incorporate the system
according to the present invention (NO in step S2), the auction
proceeds normally as is conventional, subject to potential fraud or
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abuse. If the auction venue has implemented the system according
to the present invention (YES in step S2), the system determines in
step S 3 whether the bidder has a bidder funding account. If not
(NO in step S3), the user is given an opportunity to open an
account in step S4. If the user does not desire to open an account
(NO in step S4), the user is provided with an indication that bids
cannot be made at this venue without a bidder funding account
(step S5), and the user is returned to the auction venue home page
at step S 1. If the user desires to open an account (YES in step S4),
the user is directed to the system home page 12 where account
information can be gathered and an account can be established as
described above with reference to FIGURE 3 (step S6). The
system then returns the user to step S3 to determine whether the
user has a valid account.
If the user has successfully established a bidder funding
account or the user had previously established an account (YES in
step S3), in step S7, the system determines whether sufficient
funds are available to proceed with the auction in step S7. In the
event that sufficient funds are not available (NO in step S7), an
indication is provided to the user, and the user is prompted to
deposit more funds in their bidder funding account (step S8). The
funds may be deposited by cashier's/certified check, online check,
virtual check, credit card payment, bank wire, e-mail or any other
suitable vehicle. If additional funds are not deposited (NO in step
S9), the bid is declined at step S 10, and the system returns the user
to the auction venue home page at step S 1. If additional funds are
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deposited (YES in step S9), the system returns the user to step S7
to determine if sufficient funds are available.
If sufficient funds are available for the user's bid and any
required deposit (YES in step S7), the system determines whether
the user is a high bidder in step S 11. If not (NO in step S 11 ), the
user is informed that they are not the high bidder, and any existing
bid holds or deposit holds are removed (step S 12). The system
then returns the user to the auction home page at step S 1 to place
another bid. If the user is the high bidder (YES in step S 11), a
hold is placed in the bidder's bidder funding account in step S 13.
That is, if a deposit is required to participate in the auction, a first
portion of the bidder's bidder funding account is reserved
corresponding to an amount of the deposit. In one operating mode,
a second portion of the bidder's bidder funding account is also
reserved corresponding to an amount of the bid. If no deposit is
required to participate in the respective auction, only the second
portion of the bidder funding account is reserved.
In step S 14, it is determined whether the auction is
complete, and if so (YES in step S 14), the user's bid is accepted. If
the auction is not complete (NO in step S 14), the system returns to
step S 11 to determine whether the user remains the high bidder
until the auction is complete.
When the auction is complete, the bidder may direct the
reserved funds from the bidder's bidder funding account according
to the seller's specified instructions, enabling the seller to
immediately deliver the product or otherwise effect settlement.
Alternatively, the bidder can effect settlement using funds separate
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from the bidder funding account, although delivery or the like in
that instance may be delayed until the seller receives payment. In
either instance, when settlement is complete, the reserved funds in
the bidder's bidder funding account are released.
Failed transactions can be handled in any suitable manner,
depending on the party at fault, the reason for the failed
transaction, etc. In the event that the bidder is at fault, if a deposit
was required to participate in the auction, the bidder typically
forfeits the deposit. Since the amount of the deposit is reserved in
the bidder's account, this amount can be transferred from the
bidder funding account to the seller or otherwise. The system may
require the seller to notify the system that the transaction did not
settle and demand forfeiture of the deposit. Once the seller
demand has been received, the bidder is notified and given an
opportunity to protest the demand. If no protest is received, the
system transfers the held funds to the seller. If a protest is
received, the seller and bidder are provided an opportunity to
resolve the dispute, for example, by arbitration or the like. A
similar procedure can be used in the event of seller fault. That is,
sellers may also be required to maintain "bidder funding accounts"
with seller deposits being reserved during the transaction. If a
seller is at fault in a failed transaction, the seller may forfeit the
deposit. The deposit hold and the bid hold remain in place,
however, until either the transaction is complete or until the
dispute is otherwise resolved.
The system according to the invention exploits the
impartiality of the Internet, providing an objective intermediary
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between transaction participants to ensure, for example, that
bidders are qualified to participate in an auction. The account
maintenance is also suitable for online transactions such as retail
consumer products and the like and off line transactions, for
example, transactions requiring a deposit or other financial
qualification. By ensuring that funds are available, the system
according to the invention significantly reduces or eliminates fraud
and abuse in e-commerce transactions.
While the invention has been described in connection with
what is presently considered to be the most practical and preferred
embodiments, it is to be understood that the invention is not to be
limited to the disclosed embodiments, but on the contrary, is
intended to cover various modifications and equivalent
arrangements included within the spirit and scope of the appended
claims.
