Credit Card Fraud – Techniques To Combat It To Protect Your Business And Customers Against Loss

Credit Card Fraud – Techniques To Combat It To Protect Your Business And Customers Against Loss

The likelihood of credit card fraud is always looming over credit card companies and organizations that accept card payments. The challenge is more daunting for e-commerce businesses and mail order businesses where the card is not physically present and you cannot be sure that you are dealing with the rightful card holder. Physical store businesses, on the other hand, use machines to swipe cards and the customer is on hand during the transaction. Though this does not eradicate the possibility of fraud, it does reduce 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 insurance to merchants if they have stringently adhered to all of the bank’s card acceptance and processing specifications. Even then, 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:

Review orders for full facts

Do not allow orders if all the necessary fields are not provided by the buyer. An address authentication via the credit card processing service’s AVS (Address Verification System) service is effective as most fraudulent transactions fail this test.

Verify billing and shipping address

Be wary of orders with different shipping and billing addresses. If this is the regular procedure followed by an existing customer, it isn’t worrying. Otherwise, recheck with the client. It doesn’t hurt and shields you from potential hassles.

Corroborate addresses with websites

Confirm the addresses and phone numbers of clients using online people search websites such as,, and others.

Be suspicious of free email ids

Most credit or debit card scammers rely on gratis email accounts like Gmail, Yahoo, Hotmail, etc. Though this is also the case with authentic clients,.

Save every detail of the sale

Track the IP address of clients when they are exploring your e-commerce website or placing orders. Also record the date and time of the visit, and phone chat particulars if any. Append the caller ID and any other facts to the order information. If you do get caught in a credit card fraud case, the collected information will prove useful.

Be suspicious of new customers placing orders of high value

If a new buyer places a large first order, exercise caution. If they also ask for express delivery services, you should call the customer and make sure she knows about the order.

Ask for CVV number in the order form

The purchase order form should ask clients to enter the Card Verification Value (CVV) number that is printed on the back of credit cards. Your invoicing software should store this number and pass it to the credit card processor for confirmation. Fraudsters may not know the CVV number if they don’t have access to the card directly.

Caution and adherence to process do not eliminate credit card fraud but are definitely useful in mitigating it. Follow the aforesaid strategies to protect your business and your customers.

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