Credit Card Fraud – How to Reduce It to Protect Your Business and Customers Against Loss
The likelihood of credit card fraud constantly haunts credit card companies and organizations that accept card payments. The problem is graver for e-commerce website owners and mail order companies where the card cannot be checked physically and you cannot be sure that you are dealing with the legitimate card holder. Physical store businesses, have machines to swipe cards and the customer is on hand during the transaction. Though this does not eradicate the risk of fraud, it does lessen it to some extent.
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). 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.
At times, bank issuing the card provides some coverage to merchants if they have precisely adhered to all of the bank\’s card acceptance and processing specifications. In spite of that, the business is not clear of loss as it will still see some charge backs. Credit card processing services employ fraud protection measures to prevent fraud but you can also contribute to reducing the risk of credit card fraud. Here are some tips:
Appraise orders for full data
Do not approve orders if all the required fields are not provided by the customer. An address verification via the credit card processing service\’s AVS (Address Verification System) service is effective as most dubious transactions don\’t pass this test.
Verify billing and delivery address
Be suspicious of orders with dissimilar shipping and billing addresses. If this is the normal method followed by an existing customer, it should be fine. In other cases, recheck with the client. It doesn\’t take much time and spares you from future trouble.
Check addresses from websites
Confirm the addresses and contact numbers of clientele using online people search websites such as anywho.com, whitepages.com, and others.
Be wary of free email ids
Most credit or debit card thieves depend on free of cost email accounts like Yahoo, Gmail, Hotmail, etc. Though these email accounts are also popular with authentic customers,.
Record every detail of the sale
Track the IP address of customers when they are exploring your e-commerce website or making a purchase. Also record the date and time of the visit, and phone chat particulars if any. Append the caller ID and any other particulars to the order details. If you do get caught in a credit card fraud case, this documentation will be very helpful.
Be cautious of new buyers placing orders of high value
If a new customer places a large first order, it\’s suspicious. If they also ask for overnight delivery services, you should call the client and make certain she knows about the order.
Get the CVV number when placing the order
Your order form should ask buyers 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 access to the card directly.
Caution and observance of processing rules do not eliminate credit card fraud but are definitely useful in alleviating it. Follow the above mentioned guidelines to protect your business and your customers.
Daljeet Sidhu. Compare credit card processing rates. Read credit card processing for small business advice.
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