subject: Credit Card Fraud - How To Control It To Protect Your Business And Customers Against Loss [print this page] Credit card fraud is a tough challenge faced by credit card companies and businesses that accept card payments. The challenge is more difficult for e-commerce businesses and mail order businesses where the card cannot be checked physically and there is no way of ensuring whether you are dealing with the legitimate card holder. Retail store businesses, swipe cards through POS terminals and the customer is present during the transaction. Though this does not eliminate the risk of fraud, it does lessen it to some extent.
According to the Javelin Strategy & Research, "Identity Fraud Survey Report," February 2010, the number of U.S. identity theft victims rose 12% in 2009 and the annual fraud amount equaled $48 billion. Credit and debit card fraud is the No.1 fear of U.S. residents already weighed down by the global financial crisis. (Source: Unisys Security Index: United States, March 2009).
At times, bank issuing the card affords some insurance for a merchant's loss if the business has precisely adhered to all of the bank's card acceptance and processing regulations. In spite of that, the business is not clear of loss as it will still see some charge backs. Credit card processing services implement fraud protection measures to prevent fraud but you must also make an effort to reduce the risk of credit card fraud. Here are some tips:
Assess orders for full information
Do not allow orders if all the required fields in the form are not filled by the client. An address verification via the credit card processing service's AVS (Address Verification System) service is effective as most fraudulent transactions don't pass this test.
Validate billing and delivery address
Be suspicious of orders with different shipping and billing addresses. Of course, if an existing customer, it isn't worrying. Otherwise, recheck with the customer. It doesn't take much time and spares you from potential problems.
Corroborate addresses with websites
You can check the addresses and contact numbers of clientele using web people search websites such as whitepages.com, anywho.com, and others.
Be wary of free email ids
Most credit or debit card thieves depend on gratis email accounts like Hotmail, Gmail, Yahoo, etc. Though these email accounts are also popular with authentic customers,.
Save every detail of the sale
Track the IP address of customers when they are visiting your e-commerce website or placing orders. Also document the date and time of the visit, and phone chat details if any. Append the caller ID and any other data to the order information. If you do get entangled in a credit card fraud situation, the collected information will be very helpful.
Be wary of new customers placing orders of high amount
If a new client places a large first order, exercise caution. If they also ask for overnight delivery services, you should call the customer and make sure she knows about the order.
Get the CVV number in the order form
Your order form should ask customers to enter the Card Verification Value (CVV) number that is printed on the back of credit cards. Your invoicing application should store this number and pass it to the credit card processor for validation. Fraudsters may not know the CVV number if they don't have the card in hand.
Caution and observance of processing rules do not eradicate credit card scam but are definitely beneficial in mitigating it. Follow the aforesaid strategies to protect your business and your customers.
by: Daljeet Sidhu.
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