|
||
You are 100% liable for all losses sustained. And, if there is an excessive amount of fraud or unauthorized transactions through your merchant account, your fees and discount rate could be raised, your funds could be held, or your merchant account could be closed. Be aware that authorization codes only mean that the cardholder has funds available for that transaction and does not verify the sale.
When possible, also use CVV2 (Card Verification Value). Ask the customer for the CVV2 information on the back of the credit card. If that person cannot supply you with that information, that is a sign that you may not be dealing with the actual cardholder.
Be Aware of High Risk Countries
When receiving an order from an International country it is recommended that you obtain the card issuing bank information to verify the legitimacy of the person giving you the credit card. Indonesia, Nigeria and other areas of Africa, and Singapore are the highest risk areas for accepting credit card transactions as most fraud is generated through these areas.
Minimize Risk
To help minimize your risk exposure, take the time to learn about AVS (Address Verification System) if your merchant account is set up with this feature. If the address does not match, you may not want to ship any product without verifying through the card issuing bank.
Also be aware that AVS does not work with International addresses. Always check the AVS response codes.
Best Practices
Be alert for transactions with several of the following characteristics:
* First time shoppers
* Larger than normal orders
* Orders consisting of several of the same items or orders composed of big ticket items
* Orders shipped "rush" or overnight
* Shipping to International addresses
* Transactions on similar credit card numbers
* Orders shipped to a single address but made on multiple cards
* Multiple transactions on one card or multiple cards with a single billing address but multiple shipping addresses.
Ask the customer for the preprinted numbers above or below the first 4 embossed account numbers, name of the card issuing bank and for the customer service phone number on the back of the credit card. If they cannot provide this information, more than likely this is not the actual card holder.
Site Data Requirements
Card Associations have mandated that merchants, who store account holder data (account information, cardholder information, and transaction information) in an electronic commerce environment, keep this information in a secure manner. This is to ensure that merchants are adequately protected against hacker intrusions and account data compromises.
Hacker break-in's can have potentially dangerous consequences on merchants. There could be a disruption in your merchant service and loss of consumer confidence with your business.
* Do not store CVV2 information.
* Destroy all unnecessary data.
* Use Network Security tools to protect website (firewalls).
Internet frauds are generally another kind of fraud crimes which particularly use features of the Internet to intentionally commit fraudulent transactions from unsuspecting Internet users in an objective to steal money. Chat rooms, forum sites, e-mails and websites are the most common tools used by these criminals in performing their greedy acts. Because of the power of the Internet, these fraudulent acts can be easily transmitted in any part of the world. Millions of people can be potentially vulnerable to these crimes, whether an individual consumer or large companies of investors.
With the introduction of e-commerce as means to offer goods and services to consumers, these cyber criminals do their best to depict similar offers of legal merchants in order to make easy money from innocent people without actually providing the goods and services they promised. Because of these circumstances, it had greatly damaged the reputation of legitimate companies causing them a decrease on sales and at worst, leading to loss of millions of dollars.
Credit Card Fraud
Since a large number of percentages of consumers around the world use credit card as a convenient way of shopping or purchasing goods through the Internet, it had become a target for credit card fraud. This type of fraud was considered the number one setback in e-commerce business.
Credit card fraud is done by criminals by sending e-mail messages to unsuspecting victims requesting them to update their credit card information by directing them to the website which will then ask for their sensitive personal information including credit card number, passwords and billing address. Once the information is gathered by these criminals, they will be using the credit card to purchase goods definitely charged to the victim.
Because of technological advancement, cyber criminals have become more clever and advanced in doing their illegal activities. Even the biggest e-commerce merchants who have the most sophisticated anti- credit card fraud prevention system cannot manage to totally secure their businesses from these criminals.
There are some ways in which you can prevent the risk of being victimized by this fraud. As a consumer, never provide personal information to unsolicited e-mail messages asking you to do so. Also, never share your credit card information to any website which includes chat rooms, forums and e-commerce merchants without confirming the legitimacy of their company.
Travel Fraud
Today, there are numerous legitimate travel agency websites offering big discounts or great deal packages for travelers. Many travelers avail of such services for convenience. But again, these services attracted unlawful individuals as means to collect money from consumers. They would create fake travel agency sites and deploy various advertisements, offering very attractive cheap travel packages to allure unsuspecting victims. These sites mostly collect advance payments from travelers and then afterwards run away with the victim's money.
The usual marketing strategy of these sites is to send e-mails to as many people as possible and directing them to a website containing the travel packages they offer.
In order to prevent you from being a victim of this fraud, it is important to ignore e-mail messages of travel agencies offering very cheap travel packages. As much as possible, do not respond to these e-mails as this will only prove to the criminals that you have an active account and later on you will be receiving spam mails.
In addition, investigate on the identity of the travel agency offering these deals. Gather enough information and try to inquire on other local travel agents. Never allow yourself to grab those too-good-to-be-true travel deals.
As a general rule, to avoid being victimized of these Internet frauds, you must be aware that these cyber criminals can easily create professional looking websites and post goods or services that are a lot cheaper than other companies in order to attract their prospect victims.
Legitimate merchants usually include information about their company and provide specific contact details which you can use to confirm that they are not bogus. Also, these companies do not solicit very detailed bank or credit card information such as your password or PIN. They also offer a secure way of online purchasing transaction and usually bear the VeriSign logo.