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Tips on Credit Card Fraud Prevention

Tips on Credit Card Fraud Prevention

Credit Card usage has reached an all-time high in today's economy.  The internet has accelerated the boom for credit card usage even further.  However, as we now are in the 21st century, we still have not been able to completely eliminate the enormous amount of credit card fraud that occurs each year.  In recent years,  there has been a tremendous 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.  If you accept credit cards without the customer being present at the time of the order, you are at risk.

Regardless of how you accept credit cards (internet, telephone, fax, etc.), there are certain "red flags" that statistically have proven to cause more fraudulent orders than others.  Since the merchant bears most of the risk when accepting card-not-present credit card orders, the following tips may help identify potential fraud:

1) 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).

2) Be wary of orders with different "bill to" and "ship to" addresses. Anyone who uses a different "ship to" address should send the merchant  a fax with their signature, driver license and/or the back of the credit card being used.  Customers who complain vehemently about these additional steps are probably credit card thieves to begin with.

3) When taking internet orders, be especially careful with orders that come from free email services -- there is a much higher incidence of fraud from these services (hotmail.com, yahoo.com, usa.net, etc.). Many businesses won't even accept orders that come through these free email accounts anymore. That's because it's so easy for a thief 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.

Since there are so many free email services, how do you know if the order you receive is from one of these free email services? Check every Email address by typing "www" in front of the domain name of the email address into your browser and see if it leads to a free web-email service company.

For example, if you got an order addressed from ttrumb@managemore.com and you typed www.managemore.com, you'd get to the ManageMore Web site, which is a legitimate Web site. Or, if you got an order from johnsmith@earthlink.com, you'd type in www.earthlink.com and you'd be at a legitimate ISP. On the other hand, if you got an order from johndoe@juno.com and typed in www.juno.com, you'd find yourself at a site which offers 150+ free email domains. (We're not saying juno, hotmail, etc. are not legitimate. Rather, we're suggesting that orders that come from these free email services warrant additional care and attention.)

What precautions should you take with orders from free email accounts? We recommend sending an email requesting additional information before you process the order. More specifically, ask for: a non-free mail address, the name and phone number of the bank that issued the credit card, the exact name on the credit card, and the exact billing address. Often, you won't get a reply. If you do, you can easily verify the information (which you should take the time to do).

4) Be especially wary of orders that are larger than your typical order amount, and orders with next day delivery. Crooks don't care what it costs, since they aren't planning on paying for it anyway.

5) Pay extra attention to international orders. Do everything you can to validate the order before you ship your product to a different country. Don't ship international orders which have different "bill to" and "ship to" addresses ever.

6) If you're suspicious, pick up the phone and call the customer to confirm the order. Believe us, it will save you a lot of time, and money, in the long run.

7) It pays to use point-of-sale software that supports AVS or CVV2 fraud prevention techniques.  These techniques can signficantly reduce fraud by verifying certain information against what is on file with the bank that issued the credit card.  Of course, ManageMore and the Intellicharge software support both methods.




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