5 Ways to Prevent Credit Card Fraud

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Credit card fraud happens daily.

“Fraud can be as basic as “dumpster diving,” where someone steals a credit card statement or personal information straight from a garbage can,” Matt Borneman, payment processing advisor at i3 Merchant Solutions, explains. “Or, someone may ‘skim’ card information. In this case, a criminal puts a card reader on a gas pump or ATM to steal the card info when someone inserts their card.”

Follow these tips to learn easy ways to spot fraud – and effective practices for avoiding it.

#1 For Faceless Transactions, Gather as Much Information as Possible

The more information your customer provides during faceless transactions, the better. The security code is especially key because that information is not stored in the magnetic strip or chip. So if a fraudster “skimmed” card information, for example, the payment may not go through for transactions that require a security code. It’s the merchant’s duty to verify that the security code a customer enters matches the code on the card.

#2 Watch out for Rush Orders

This is particularly critical when a consumer rush orders a large quantity of expensive goods. “Rush orders give you less time to think about what’s going on. Naturally, you want to make the sale and get the order out,” Matt explains.

Take your time to ask the necessary questions of the consumer you’re dealing with. If they refuse to give information – whether it’s something as simple as a phone number or other identifying factors, you should be skeptical.

#3 Orders That Are Shipped to a Different Billing Address Could Raise a Red Flag

While there could be a variety of legitimate reasons a consumer’s billing and shipping addresses don’t match, it’s worth assessing the risk before going through with the transaction. Here are a few questions you can ask to minimize your risk:

  • Is the order normal for your average customer?
  • Is the order for only your most expensive items?
  • Did the customer change the shipping address after the order was placed?
  • Did the customer request expedited shipping?
  • Is the shipping address drastically different from the billing address?

#4 Know Who Your Payment Processor Is

Continue to check on your payment processor to verify that they’re a reputable company to help you maintain optimal security when accepting payments. “Just by speaking to them, you can learn a lot. Do they know what they’re talking about? Are they recommended by the Better Business Bureau? Plus, you can use the internet to continually validate their credibility,” Matt points out.

#5 Take Advantage of the Fraud Protection Tools at Your Disposal

Most payment gateways and some eCommerce platforms offer a suite of fraud protection tools that can detect or prevent fraud. Many merchants, however, don’t take advantage of these resources. Your payment processing advisor can help explain how to leverage these tools to protect your business.

Learn More about Ways to Reduce Credit Card Fraud Risk:

Contact i3 Merchant Solutions online or call 1-800-621-8931.

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