We have already given 10 tips on minimizing eCommerce Fraud Exposure. But it’s not just about spending money on fraud detection/prevention systems. You first need to understand the kinds of fraud you can be exposed to. Only then can you figure out the ways to save yourself from them.

Detect the type of fraud

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The most advanced criminals will give you a fake card or a card obtained via skimming. There is little you can do in such cases since the criminals themselves practice fraud as a means of earning a living and are very good at it. Other difficult to track fraudsters are those that use Credit Card Generators, sophisticated software that generates fake CC information.

What you will face more often, however, is a kind of fraud where the customer will claim he never placed any order, or never received it. Another kind of fraud you can be exposed to is a Card Not Present (CNP) fraud. Here the purchaser has no physical card.

How can you identify frauds?

A big sign will be multiple orders being placed for the same item over a short period of time, or even orders being placed for multiple items at a rate faster than you are used to. Unless you have invested in advertising, there is little reason for order volume to go up suddenly. If you spot such a change then, rather than being pleased with your luck, you should hit the panic button and try to figure out why there are so many orders. More likely than not, you are being tried to be victimized by a fraudster.

Another sign to look for is inaccurate addresses. An address with only a P.O. Box number rather than a full address is riskier. Also, if you have the time and resources, look up the address provided before shipping. If it seems suspicious, like an old abandoned building, then it’s best to refuse the order.

Lastly, if your customer is using a free email id, request verification via other means, such as faxing over required information. It’s very easy to create a fake email id to place an order then discard it forever.

Use systems like AVS and IVR and always get a signed receipt

AVS is widely used already for fraud prevention. A lesser used method, however, is IVR systems like VoiceStamps. Such systems can be used to aurally record your customers’ placing the order. If the customer later claims that  he/she never placed the order, you have proof that he/she indeed did place it. Also, have your customer sign an acknowledgement of receipt and get a copy of the acknowledgement. That way your customer cannot claim that the order wasn’t delivered.

Being aware of the various methods you can be victimized can go a long way in preventing fraud. Most times, you need to take simple methods to prevent cases of fraudulent transactions. Of course, there is only so much you can do in cases of stolen credit cards and the like, but there is definitely no reason why you shouldn’t work on preventing other kinds of fraud.

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