9 WAYS TO SPOT FRAUD AND AVOID PROCESSING STOLEN CREDIT CARDS

Obviously, it is a big NO! Any thief, fraud or criminal could be there and you will not take risk with your protection.

Then why become lenient and careless with your own business! Fraud is an unignorable fact of the business. Fraud not only affects your business monetarily but also ruins the hard-earned goodwill of your business in market. 

If your business accepts credit cards, then there a lot chances where a customer use a credit card that is not legally theirs. When fraud is committed by any customer, then your business becomes highly prone to the risk of chargebacks, as the real owner of the card wants the lost fund.

We cannot permanently remove frauds but we can manage them by knowing proper measures and steps which can be taken to avoid processing of stolen credit card numbers.

Here is the bunch of things you can keep in mind while verifying the legitimacy of transaction. These steps are not in any specific order and not every step will apply in each type of transaction. This will definitely help you in protecting your business from frauds.

1. Continous declined orders with the same shipping address.

Keep an eye and notice series of “Declined” and “Pick up card” notices because master mind fraudsters and thieves have more than one stolen credit cards and they will try continuously with every possible card until they get an approval transaction.

2. Similar address or location has witnessed chargebacks before also.

Identify, analyse and follow the pattern of precious chargebacks, try to crack these regions and countries. For a certain type of products, there are some specific regions and countries which have witnessed large number of fraud cases and many merchants avoid making customers in those regions. Make a certain range; if a specific area crosses it take it as a red signal and you can also ban that particular area from purchasing your product. Remember few pennies are not more important than the reputation of your business!

3. Unordinary purchase.

One of the common strategies of thieves is to buy and then sell it further at higher prices. So they might order large number of a same product. These cases are common with online industries dealing in small products like apparel’s industry, nutraceutical industry etc. To avoid such frauds keep an eye on the history of nature of purchase done in past by that customer and be aware of orders that don’t fit with rest of the previous purchases. Don’t get trapped in these large transactions which seem good because not everything that glitters is gold!!

4. Don’t miss the CVV.

CVV stands for Card Verification Value. The CVV number is 3 digit number on your credit card. CVV is an anti-fraud security feature to help merchant to ensure that the customer physically has the card in their possession. Basically, CVV codes are designed to prevent fraud during card-not-present (CNP) transactions. You should always ask for CVV code and enter it as part of transaction. If CVV is not provided by the customer it means it might be a case of fraud. But always remember you cannot store or make a note of anyone’s CVV. It is considered as a crime under Card Brand Rules.  

5. Same customer but multiple orders using different credit cards.

Fraudsters will somewhere leave a clue or their activities will give you hints that something wrong is happening. To decode these clues and hints, notice the pattern, take care of some unusual activity like getting request of multiple purchase from different credit cards but from the same shipping address. Be careful this can be a trap.

6. Call and verify telephone area code matches the address.

Calling your customer can help you in two ways.

• Firstly, by calling you can analyze the attitude of customers. Did they sound confident or nervous? Did they fumble? Did they sound in hurry? Did they were angry when you ask to confirm the information? All these types of question can help you in judging the customer’s intention.
• Secondly calling will also help you to verify that the customers are within the same area as their billing and shipping address. Telephone area code will help you in getting the exact location.

7. Shipping address and billing address is same.

This may have small affect on your sales but it will greatly reduce the chances of fraud. For this you have to put a condition that shipping destination to be same as billing address to complete the transaction. This is because it has been seen that fraudsters provide billing address of the stolen cardholder but will put their own address as the shipping destination. It is not a compulsion on you, you can also make sure to restrict shipping to a particular region, country which is not prone to risk. It’s totally your wish.

8. AVS

AVS that is Address Verification Services is a common fraud prevention tool that matches the billing address of the purchase against the address that the card issuer has on file. Its main purpose is to make sure that the person who is making purchase with the credit card is valid and not fake. AVS plays an important safeguard from chargebacks done in case of transaction from stolen credit card or fraud. If you have the any proof of shipping address of delivery then it would work in the favor of you as strong evidence and you will be free from chargebacks. Although AVS codes are not always a foolproof way to filter out fraud, it is still important for merchants to use them.

9. Complete information given by customer.

Information provided by fraudsters may seems suspicious like email address and shipping address. Always check the email address used when placing that order because phishing is really common these days. Look out the address and details given, fraudsters sometimes lack proper formatting. Street, postal/zip code, city etc everything should be there. Also look out to the personal info like name of the customer. First and last name should not be incomplete.

These are some basic steps which can help in protecting your business. We cannot completely remove frauds but we can manage them buy being aware and with the presence of brain. Even the smallest ignorance can highly cost your business. For any other suggestions and confusions related to your business online merchant account iPayTotal is ready to help u 24/7.

Be vigilant and safe your business!!