If the title of this article piqued your interest, you likely know the seriousness of online credit card fraud or, worse, have been stung by this growing problem. So what can you do to protect yourself? Medical doctors have been known to tell their patients “an ounce of prevention is worth a pound of cure.” This is great advice for health problems and it also makes sense for online fraud. If, from the outset, you can make it difficult for criminals to carry out fraudulent transactions, you will likely end up saving a lot of time and money. In order to help you, we have compiled a list of prevention tips:
• Use a secure server. If you are already hosting your site with us, your transactions are going through a secure server. If you aren’t using a secure server, you could actually be contributing to credit card fraud.
• Keep good records. Record keeping is a good idea in general. If you haven’t done so already, set up a filing system for all business and customer information. Specifically in the context of preventing fraud, record keeping will allow you to easily spot patterns suggesting repeat offenders.
• Use the Address Verification System (AVS). This will confirm that the address and zip code given by the customer matches the address and zip code associated with the credit card. If you are using a credit card gateway, this feature can easily be turned on and configured. Please note that although AVS is a good technique to use, it is by no means foolproof and has definite limitations.
• Use Card Verification Codes (CVC). Most credit cards have a special 3 or 4 digit number printed on the back. This number does not appear on statements, receipts, or anywhere else other than on the card. We recommend including this field on your payment form and using it to verify your customers’ credit cards. If the customer can give you this number (and it successfully goes through the verification system of the particular credit card company), there is a good chance they are actually in possession of the card.
• Use a real-time credit card authorization gateway on your site. This will verify that the credit card number exists and that it has not been reported stolen. It is possible that someone can steal a card number and make a charge against it, so be aware of orders that are abnormally large or exhibit one of the other "red flags" described below.
• Post a warning on your website that says you use anti-fraud procedures. Simple, but effective. Some people won’t attempt credit card fraud if they think it’s going to be too much trouble or too dangerous.
• Screen out multiple orders from the same IP Address. Some sophisticated Internet criminals write programs to submit orders using random credit card numbers until they find one that works. Datahost can assist you with this screening tool.
Just as you can’t always prevent the onset of an illness, you can’t always stop criminals with your first line of defense. Once you have received an order, the goal is to recognize thievery before a fraudulent purchase is confirmed. There are many indicators or symptoms of credit card fraud that you can keep an eye out for when processing orders, or look for when you already have suspicions. The following is a list of some of the most common indicators:
• E-mail address from a free provider
• Shipping address doesn't match the mailing address
• IP address is from a different country than the addresses given
• Large orders from first-time customers
• International orders
• Orders with incomplete information
• Overnight/Express delivery
• Same shipping address, different credit cards
• Multiple orders sent from the same IP address
• Same credit card number, different expiration dates
• Orders with an unusually high number of the same item
• A phone number from a different state than the billing address
The appearance of one or two of these indicators isn’t conclusive, of course, but several of these red flags coming through on your orders is a cause for concern.
If you think you’ve discovered orders with a fraudulent intent, you’ll want to confirm your diagnosis before canceling the transaction. Here are some procedures to go through if you suspect fraud:
• Look up the person’s telephone number at http://www.switchboard.com/ and see if the resulting information matches what was given to you.
• Send the person an E-mail. If it bounces back, you’ll know something strange is going on.
• Telephone the person. Tell the person that you need the name of the bank that issued the card for verification purposes. In most cases, only the real owner would have this information.
It’s not always easy to spot fraud, but these tips are concrete things you can do to protect yourself. There’s no need to treat every order with suspicion, but staying watchful and vigilant before there is a problem can save you time, money and the hardship of cleaning up the aftermath of credit card fraud.
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If the title of this article piqued your interest, you likely know the seriousness of online credit card fraud or, worse, have been stung by this growing problem. So what can you do to protect yourself? Medical doctors have been known to tell their patients “an ounce of prevention is worth a pound of cure.” This is great advice for health problems and it also makes sense for online fraud. If, from the outset, you can make it difficult for criminals to carry out fraudulent transactions, you will likely end up saving a lot of time and money. In order to help you, we have compiled a list of prevention tips:
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