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Credit Card Fraud - Top Tips To Mitigate It To Defend Your Business And Customers Against Loss

Credit Card Fraud - Top Tips To Mitigate It To Defend Your Business And Customers Against Loss

The prospect of credit card fraud constantly haunts credit card companies and businesses that accept card payments

. The problem is graver for e-commerce businesses and mail order businesses where the card is not physically present and you cannot be sure that you are dealing with the legitimate card holder. Physical store businesses, on the other hand, use machines to swipe cards and the customer is on hand during the transaction. Though this does not do away with the possibility of fraud, it does reduce it to some extent.

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). 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.

In some cases, bank issuing the card affords some coverage to merchants if they have strictly followed all of the bank's card acceptance and processing guidelines. In spite of that, the business still has charge backs to deal with. Credit card processors employ fraud protection measures to prevent fraud but you must also do your own bit to minimize the risk of credit card fraud. Here are some tips:

Examine orders for full information

Do not accept purchases if all the mandatory fields are not provided by the buyer. An address authentication via the credit card processing service's AVS (Address Verification System) service is effective as most dubious transactions fail this test.

Validate billing and shipping address

Be wary of orders with different delivery and billing addresses. If this is the normal procedure followed by a regular buyer, it isn't worrying. In other cases, recheck with the client. It doesn't take much time and saves you from potential hassles.

Verify addresses from websites

Confirm the addresses and contact numbers of clients using online people search websites such as,, and others.

Be wary of free email ids

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

Save every detail of the sale

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

Be wary of new buyers placing orders of high amount

If a new client places a large first order, exercise caution. If they also ask for overnight delivery services, you should call the customer and make certain she actually placed the order.

Get the CVV number in the order form

The purchase order form should ask customers to enter the Card Verification Value (CVV) number that is printed on the back of credit cards. Your invoicing software should save this number and pass it to the credit card processor for verification. Fraudsters may not know the CVV number if they don't have access to the card directly.

Caution and observance of processing rules do not eliminate credit card scam but are definitely effective in alleviating it. Follow the aforementioned strategies to protect your business and your customers.

by: Daljeet Sidhu
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Credit Card Fraud - Top Tips To Mitigate It To Defend Your Business And Customers Against Loss