Mail-order and e-commerce businesses have a higher chance of having a credit card transaction that isn't what it seems to be than stores that are open to the public.
Since neither the Cardholder nor the card is present during the transaction, the merchant has no easy way to tell if they are dealing with a real customer or not.
The U.S. Federal Bureau of Investigation (F.B.I.) and the Internet Crime Complaint Center (IC3) recently put out a report that says:
"In 2006, 6,3% of all complaints were about credit card and debit card fraud."
This means that online stores that accept credit and debit cards will lose more than $60 billion (U.S.) in sales. Some of those losses are covered by the Issuing Bank, which may reimburse the merchant if all of the bank's rules about accepting cards and processing them were followed to the letter. However, some of those losses may still be charged back to the merchants.
Follow these tips to make it less likely that your credit card will be stolen:
- Be wary of first-time orders with a lot of money. If your first contact with a new customer is for an unusually large amount of money, or if they want an overnight delivery, call them to make sure you have the right contact information.
- Keep all paperwork about the deal. Make sure that your shopping cart stores the customer's I.P. address and the date and time that they visited your site. If you are looking into fraud, this information will be useful to you. Add the customer's Caller ID information to the order record if you've talked to them on the phone.
- Use any of the free White pages websites, like Whitepages.com, to check customer phone numbers and addresses.
- Be wary of orders with different Ship-To and Bill-To addresses, unless the order is from a regular customer and this is how they usually order. Even so, be careful if the customer enters a Ship To address that is different from the one they usually use.
- Don't use Free Email Addresses without being careful. Most people who try to steal credit card information use free email addresses from HotMail, Yahoo, and other places.
- Carefully look over every order. Make sure the customer filled out the order form with all the right information. Check to see if the order passed the address verification check of your credit card processor (AVS). Most fraudulent credit card transactions fail to pass AVS.
If you're not sure, call the customer. Most of the time, you can avoid being scammed by just calling the customer at the number they gave on the order form. If you can't reach the customer or the person who answers the phone doesn't know who the customer is, you should cancel the order. It's better to play it safe than to get hurt.
- Make sure that your order form asks the customer to enter the CVV number that is printed on the back of their credit card. And make sure that your software tells your credit card processor what this number is. If the cardholder knows the CVV, it usually means that they have the card in their hands and aren't just using a number they stole from somewhere.
Even though there's no way to know for sure if these 8 steps will completely stop credit card fraud, there's a good chance you can cut it down a lot just by being aware and following up on your suspicions.
