How To Combat Credit Card Fraud
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
How to Combat Credit Card Fraud
Overview
Mail order businesses and e-commerce platforms face greater risks of credit card fraud compared to physical stores. The absence of the cardholder and the card during transactions makes it challenging to verify the legitimacy of customers.
A report by the U.S. Federal Bureau of Investigation (FBI) and the Internet Crime Complaint Center (IC3) highlighted that credit and debit card fraud accounted for 6.3% of complaints in 2006, resulting in over $60 billion in lost revenue for online merchants. While issuing banks may cover some losses if their rules are followed exactly, merchants can still suffer from chargebacks.
Tips to Prevent Credit Card Fraud
1. Thoroughly Review Orders
- Confirm that customers complete all fields on the order form.
- Ensure orders pass the Address Verification Service (AVS), as many fraudulent transactions do not.
2. Monitor Shipping and Billing Addresses
- Watch for differing shipping and billing addresses, especially if it’s a new customer.
- Stay alert even with returning customers if there’s a new shipping address.
3. Be Cautious with Free Email Addresses
- Many scammers use email services like Hotmail or Yahoo. Cross-check these addresses for legitimacy.
4. Maintain Transaction Records
- Store customers' IP addresses and visit timestamps for future reference.
- Add Caller ID information if you have phone contact with the customer.
5. Be Wary of Large Initial Orders
- For first-time, high-value orders requesting expedited shipping, call the customer to verify contact details.
6. Verify Customer Details
- Use services like Whitepages.com to confirm customer phone numbers and addresses.
7. Directly Contact the Customer if Suspicious
- Call the number provided to verify the order. If the customer cannot be confirmed, cancel the order. It's better to err on the side of caution.
8. Require Card Verification Value (CVV)
- Ensure the order form requires the CVV from the customer's credit card, and that this information is sent to the processor. Knowing the CVV usually indicates the cardholder has the actual card.
By following these guidelines, you can significantly reduce the risk of credit card fraud, though it's impossible to eliminate it entirely. Remain vigilant and trust your instincts when something seems off.
You can find the original non-AI version of this article here: How To Combat Credit Card Fraud.
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