When your business address is prefaced by “www” and ends in “.com”, you need all the help you can get when it comes to preventing online credit card fraud. You’re already paying more in merchant account fees because you deal in CNP (card not present) credit card transactions, so you want to lower your risk of getting slammed by fraudsters and identity thieves. Here’s a few suggestions:
1. Check whether the order is coming from a “high risk” country. Any order that comes from outside the U.S. should raise a big red flag, and some of those flags fly higher than others. Granted, just because the order originates in a country on the first list doesn’t guarantee that it’s fraudulent, but it should motivate you to use other tools to confirm its legitimacy.
2. Beware the free or anonymous email address. These include providers like hotmail.com and yahoo.com, whose email accounts are virtually untraceable. Legitimate customers may well use free email addresses for the convenience and cost savings they offer, but so do most fraudsters intent on remaining anonymous. In the B2B environment, however, most businesses have their own domain names; if not, exercise caution and get additional information, such as the customer’s geographic location, to determine if their order needs to be checked further.
3. Check the mailing address. Is it a mailbox or ship-forward service? Fraudsters want to cover their tracks while collecting their ill-gotten booty. A public post office box, private mailbox or drop shipment forwarding address fits their strategy. Think twice before sending merchandise to any of these types of addresses.
4. Confirm that the address on file with the card issuer matches the shipping address. This service, known as address verification system is offered by many reputable merchant account providers. A thief who’s using a stolen credit card or account number to make a purchase will have the order shipped to their own address or that of an accomplice, not the cardholder’s address. By using AVS, you can quickly confirm this discrepancy.
5. Contact the issuing bank to verify the card. A quick, toll-free call to the customer service department of the bank that issued the credit card is in order if you have any suspicions about the validity of the account. The issuing bank phone number is based on the Bank Identification Number (BIN), which is found in the first 6 digits of credit card number.
All merchants — online or off — must be aware of the threat of credit card fraud and be ready to implement security measures like those outlined above. Total elimination of credit card fraud may be out of reach, but managing your exposure to it is not, especially when you team up with an experienced merchant account provider