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Identifying Online Credit Card Fraudsters

By: Robert Thomson

As more and more retail and service providers make the decision to sell their products online in order to meet demand, online increases and millions are spent in expenses each year. Most online fraud is committed by using stolen credit card information; the most common method is copying information from retailers, online or offline. ‘Hackers’ are skilled in breaking into company databases where they are able to steal clients’ credit card information, thousands at a time. In some cases the employees of large companies have benefited by selling credit card information and personal details to criminals. Merchants who sell and ship their products online have to deal with the security issue of the credit card holder and card not physically present at the time of purchase, (commonly known as CNP - card not present) so the merchant has to depend on the details that the buyer inputs online. It is impossible for a merchant to verify that the purchase is legitimate. There are various ways to try to identify and prevent credit card fraud. Below are a few tips that might help identify this type of fraud.

Each computer has its own unique address that identifies the location of the computer network. This is known as the IP address. You can identify where the order was placed by finding out the IP address.

Always be cautious of orders where the address for the item to be sent to is a Post office box number or a mail forwarding address. Google can check an address and identify if it is a mail forwarding company.

Unusual orders should always be carefully scrutinized. These might be requests for vast quantities of the same product or the same item ordered in multiple quantities. Also watch out for multiple orders placed from the same customer or orders placed with different names but the same credit card number or the same shipping address.

If the customer requests the order to be dispatched straight away don’t be inclined to rush through the security checks in order to not lose the sale. Many fraudsters do this deliberately, on the basis that if they give you limited time details won’t be checked thoroughly.

Some order processing software has referrer information on orders so you can look into which terms the customer used to find your site. When searching for products, people will normally search the category or the keywords products are advertised under, when fraudsters are looking they will be more likely to search under ‘overnight delivery’ or ‘international shipping’ rather than the keywords associated with the product.

Normally the billing address matches the shipping address, so if these differ take care to check through other details provided.

Contact details provided can sometimes send up discrepancies. Look out for the area/city given as the address and see if the area code is a match. If the customer uses a free email account, such as Yahoo, Hotmail or Google, be wary of email addresses that don’t match the customer's name.

Many fraudulent transactions can be prevented straight away with vigilance and an awareness of what to look out for. If you are really unsure of an order never complete the transaction unless you have done everything you can to confirm the details. Sometimes this can be a simple email or phone call to confirm or verify details. If emails and phone calls go unanswered then automatically be suspicious. As the merchant, if a credit card is a fraud then the goods or services are lost along with the payment, the fees for processing the payment, any currency conversion commissions and there will be a chargeback penalty. On the other hand, if merchants refuse transactions as they are suspicious they face the chance of losing a legitimate sale. Merchants suspicious of orders placed for products and suspect stolen credit card information is being used should contact the appropriate credit card provider, (visa/amex/discover, etc.) to get the issuing bank's telephone number then contact the bank to report the stolen customer's credit card.

There are a number of good websites that provide anti-fraud systems. A good system will protect you from fraudulent transactions, meaning less losses and more profit for your business and ultimately benefit your customers.
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