Credit Card Fraud - Strategies To Ward It Off To Protect Your Business And Customers Against Loss

The possibility of credit card fraud is always looming over credit card companies and organizations that accept card payments. The problem is more difficult for e-commerce businesses and mail order businesses where the card cannot be checked physically and there is no way of ensuring whether you are dealing with the lawful card holder. Brick-and-mortar store businesses, on the other hand, use machines to swipe cards and the customer is present during the transaction. Though this does not eradicate the risk of getting conned, it does lower it to some extent.

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. Credit and debit card fraud is the No.1 fear of U.S. residents caught in the global financial crisis. (Source: Unisys Security Index: United States, March 2009).

In some cases, bank issuing the card affords some insurance to merchants if they have precisely followed all of the bank's card acceptance and processing guidelines. Even then, the business is not clear of loss as it will still see some charge backs. Credit card processing services implement fraud protection measures to prevent fraud but you must also make an effort to minimize the risk of credit card fraud. Here are some tips:

Assess orders for full facts

Do not approve purchases if all the mandatory values in the form are not filled by the buyer. An address authentication via the credit card processing service's AVS (Address Verification System) service is helpful as most dubious transactions don't pass this test.

Check billing and shipping address

Be wary of orders with different delivery and billing addresses. If this is the normal procedure followed by an existing customer, it isn't worrying. In other cases, recheck with the customer. It doesn't hurt and spares you from potential hassles.

Corroborate addresses with websites

You can check the addresses and contact numbers of clientele using online phone directory websites such as anywho.com, whitepages.com, and others.

Be wary of free email ids

Most credit or debit card scammers use gratis email accounts like Hotmail, Gmail, Yahoo, etc. Though these email accounts are also popular with authentic customers,.

Record every detail of the purchase

Track the IP address of clients when they are exploring your e-commerce website or placing orders. Also document the date and time of the visit, and phone conversation particulars if any. Add the caller ID and any other facts to the order details. If you do get entangled in a credit card fraud case, the collected information will be very helpful.

Be wary of new buyers placing orders of high value

If a new client places a large first order, it's suspicious. If they also ask for express delivery services, you should call the customer and make sure she actually placed the order.

Ask for CVV number when placing the order

Your order form should ask clients to enter the Card Verification Value (CVV) number that is printed on the back of credit cards. Your invoicing application should save this number and pass it to the credit card processor for verification. This reduces the risk of fraud as criminals typically only have the credit card number to go with.

Caution and adherence to process do not eradicate credit card scam but are definitely beneficial in mitigating it. Follow the above mentioned guidelines to protect your business and your customers.