Credit Card Fraud
There has been a great amount of publicity about the dangers of credit card fraud on the Net which makes consumers afraid to reveal their credit card numbers over the Net.
Therefore, online shoppers should take precautions when giving out any confidential information (including credit card number) over the Internet, over the phone. or anywhere else for that matter. Always use common sense -- it is the best rule of thumb.
There has been an increase in the number of merchants who have been scammed by crooks who place fraudulent orders using stolen credit card information. Unfortunately, merchants are not provided the same protection as consumers when it comes to credit card fraud. In fact, merchants are completely at risk.
It has been discovered that crooks can even now create fictitious credit card numbers based on the algorithms used to produce authentic numbers. These fictitious credit card numbers pass through verification and will be given approval codes. There are also newsgroups which post stolen credit card data (so if your card number is stolen, it may be posted to the world in a matter of minutes).
Eight Steps to Minimise Credit Card Fraud
Below are some tips for merchants to minimize the risk of credit card fraud:
Begin taking a few extra steps to validate each order. Don't accept orders unless complete information is provided (including full address and phone number). Address Verification should be required for all credit card orders.
Be wary of orders with different "bill to" and "ship to" addresses. Anyone who uses a different "ship to" address should be required to send a fax with their signature and credit card number authorizing the transaction.
Be especially careful with orders that come from free email services -- there is a much higher incidence of fraud from these services (hotmail.com, juno.com, usa.net, etc.). Many businesses would not even accept orders that come through these free email accounts anymore. That's because it's so easy for a scamster to open a free, anonymous email account in another person's name and then send you, the merchant, an order using the fake email account and a fraudulent credit card number.
Be especially wary of orders that are larger than your typical order amount, and orders with next day delivery. Crooks do not care what it costs, since they aren't planning on paying for it anyway.
Pay extra attention to international orders. Do everything you can to validate the order before you ship your product to a different country. Do not ship international orders which have different "bill to" and "ship to" addresses.
If you're suspicious, pick up the phone and call the customer to confirm the order and this will save you a lot of time, money, in the long run.
Consider using software or services to fight credit card fraud online. There are some positive reviews from those who have used Cybersource and Clear Commerce Corp.
If you (as a merchant) do have the misfortune of being scammed by a credit card thief, you should contact your merchant processor immediately or your ISP and inform them of the situation.
