If you are running an eCommerce website, you will often have to deal with credit card fraud. When this happens, you will lose valuable time and money. Luckily, if you take a closer look at your transactions, you won’t have to worry about chargebacks anymore and you will avoid dealing with dishonest people. All you have to do is follow a few easy steps and you will be able to avoid fraud in most situations.

1. Check the IP Address

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A good way to detect fraud or suspicious behavior is to check the IP address of each order and match it to the destination of the shipment. There are many free programs and websites that can trace IP addresses and if you notice that a large order is being placed for a different location than that of the IP address, you should take a closer look at the buyer. You can also find out if the order was placed through an anonymous proxy. In this case, the chances of fraud are even higher since most people would not try to hide their location without a reason. This is not an exact science and sometimes the buyer will be honest, but it is best to double check if something is suspicious and the order exceeds a couple thousands of dollars.

2. Ask For an ID

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Most people who attempt to purchase items with the help of a stolen credit card will run into problems if you ask them for their ID. A false driver license is not easy to obtain, so you should ask for one if you have any reason to suspect that the order is fraudulent. You shouldn’t bother your regular customers with extra identification methods, but those who want to make large orders should abide to these rules.

3. Look At The Country of Destination

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You can find a list of high risk countries on the internet, but you shouldn’t put much work into it. Just because fraud is more prevalent in some nations, you shouldn’t punish every client that lives there. Try to use this method of detecting fraud only if the buyer offers you some other reason to be suspicious.

4. Hire an Anti-Fraud Expert

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The best way to make sure that you won’t have to deal with fraud is to hire someone who can improve the quality of your services and keep an eye on every transaction. Anti-fraud experts can implement new methods of stopping suspicious transactions and they can lower the total number of chargebacks you usually have to deal with. The right person will implement a better credit card processing strategy and he will offer some extra tips on how to avoid fraud.

Conclusion

Detecting fraud is a difficult job and sometimes it is best to let the professionals handle it. If you don’t want to spend money in this department, you will have to take a closer look at each transaction and rely on your instincts if you want to catch fraud before it happens.

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Ever since the internet was invented, people have tried to use it as a way to make money illegally. Some of these scams have been around for years, but people still manage to get tricked by what seems to be a thing of the past. The truth of the matter is that knowledge makes the difference between avoiding fraud and getting tricked. If you want to be sure that you won’t fall into the web of internet scams, you simply need to know what you’re up against.

The Nigerian Scheme

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The Nigerian Scheme is by far the most common fraud method you can run across. If you have an email address, it is only a matter of time until you will receive a suspicious email. The exact content of this message can vary, but it is quite easy to detect. You will receive an email from a person you don’t know and he will offer you a complex story which ultimately ends in asking for money. Most of the time, the sender will give a somewhat plausible reason which might make you wonder.

Nigerian Scheme Variants

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The person who is sending an email might ask for your help because he allegedly has a blocked account with millions of dollars from an inheritance and needs only a few hundred to leave the country and get access to his fortune. He will promise you a serious compensation, but you will never receive it. Another common email that people receive is from an alleged hitman. He will tell you that he was hired buy one of your relatives or close friends and he will ask for money in exchange for your life.

Lottery Scams

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Many of the scams that happen online are related to lotteries. People often receive emails saying that they’ve won a trip or a large sum of money. If this happens, you have to make sure that you actually participated in such a lottery and that the person who is contacting you isn’t a scammer. If he asks for credit card information or any type of payment for any reason whatsoever, you are most likely dealing with a scam.

Phishing

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If you are using a home banking system, you have to be sure that you access the right website before you start imputing your password. Many hackers make clones of popular websites and start sending the links to thousands of email addresses. If you click on the link, the website will look exactly as the one of you are used to, but your password and account information will be sent to the hacker once you click the submit button.

What Do These Scams Have in Common?

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A large majority of the scams will start with a few simple emails, in the hope that the sender will make you feel safe. When the person starts asking for money, he will most likely ask for your credit card information or a transfer from a Western Union bank. These transfers don’t allow charge backs and the person who is receiving the money can’t be identified. In the end, you have to ignore emails which seem too good to be true or you can report them to the police.

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Shopping online is a great way to find new products and offers, but there is also a disadvantage that throws many people off: lack of security. If you are new to internet shopping, you should learn a few things about fraud and how to prevent it. You don’t have to spend hours trying to learn the secrets of the online world, you need just a few minutes to make sure that hackers won’t take advantage of you and your credit card. Here is what you need to know.

What Hackers Want

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If you have a credit card that you want to use for online shopping, the store will need the 16 numbers from the front of the card, your name, the expiration date and most importantly, the last three numbers from the back of your card. If someone with bad intentions has access to these pieces of information, he can start shopping with your credit card, without actually having it.

How To Stay Safe

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You have to make sure that you never disclose these numbers to anyone. If you receive a call saying that you won a prize and you need to offer those numbers, you are close to getting tricked. This is exactly why you should stay safe and keep your credit card information secret; don’t keep the date stored on your computer and don’t write it down in your email either. Unfortunately, the only way to make a purchase online is by writing these numbers on the website you are making a purchase from. How can you do it and still stay safe?

Making a Purchase

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When you want to buy something from an online store, you have to make sure that the website is reliable and that you are visiting the right address. You should never click on links which seem suspicious, so just type the address yourself and you will be good to go. The most popular online shopping websites have very strict security protocols, so you can be sure that your credit card information will remain private even after you make a purchase. If you really want to buy a product from a website that doesn’t seem reliable, there is an easy way to figure out if you should make the purchase or not. Just type in the name of the store on Google and search for other people’s opinion regarding the services. You will either find complains which is an obvious warning sign or you will find people who can confirm that the website is not a scam.

Paying Attention

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The easiest way to keep your credit information safe is by paying attention to what you’re doing. Don’t click on links you are not familiar with, never write down your information on suspicious website, keep your anti-virus software running and always search for feedback before you make a purchase. This way, you will never have to worry about credit card fraud and your bank account will be safe.

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If you are starting to get familiar with the online world and you need to make a transaction, you will hear about PayPal. It is considered the easiest way to transfer money through the internet, but is it really secure?

PayPal – The Beginning

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PayPal was founded in 1998 and in 2002 was purchased by eBay. It is now the largest online payment service thanks to the reasonable fees, customer service and most important of all: its popularity. There are over 70 million active accounts worldwide and chances are that your current and future business partners already have a PayPal address.

Basic Safety Features

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Before sending any amount of money online, it is best to make sure that none of the parties involved will have to deal with an unsuccessful transaction. There are many problems that can arise if the intermediary is not capable of handling the task and it is your job to make sure that PayPal can live up to its name.

When the account is first created, you have to provide a valid email address, the answer to a security question and the information from a credit card or your bank account. This deters most people who would be inclined to fraud because obtaining a fake bank account is not an easy task.

Extra Security Measures

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If someone hacks into your account and starts making transfers, you can file a dispute with PayPal. The company is known for offering protection against unauthorized payments, so you will most likely receive a full refund in this case. This is definitely a plus when it comes to choosing PayPal as your online payment processor, especially considering the fact that regular banks can only offer the same treatment in the case of credit card fraud after months of investigations.

Another safety feature implemented by PayPal will put your account on hold in the case of suspicious behavior. You will still be allowed to use it, but the anti-fraud department will keep an eye on what’s happening and they will ask for documents which prove that you are the person who is making those transactions. This means that you won’t have to worry about someone spending your money, even if you happen to be the victim of a hacker.

eBay and PayPal

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Because PayPal is now connected with eBay, you will receive special treatment if you use both of these services. Buyer protection is available for transfers of up to $1,000 and disputes are settled in record time.

Conclusion

Making transactions online doesn’t have to be risky if you know which service to use. PayPal offers certain security features that are not available anywhere else on this market, which is exactly why the service is so popular. If you want to send or receive money without having to worry about internet fraud, PayPal is your safest bet. Even so, you have to realize that any online transaction poses a risk, so you should never let your guard down.

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Online fraud is a popular creation of this very era. You confront numerous situations online where you are on the verge of being struck with any of similar fraud situations. It’s really hard to distinguish a genuine email and a scam. The tips and tricks that they use is probably more sophisticated and sound then a genuine email in itself. They seem to be from reputed sources and ultimately setting you in great problem.

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Fraud Exposing tips:

There are certain tips that you can always follow to see if the source is a credible one or it’s just another trap to cost you money for no good. These are the ways in which you can identify the credibility:

1. Analyze the tone: tone does help a lot in analyzing the credibility of the one sending you such email and the fraudulent are in rush for most of the time. They ask you for frequent updates and verifications just to make sure that you believe what they stay and they get the required information.
2. Request of information: They request you for certain personal information of yours. You will be asked for your account number, credit card number and other personal details that can help them loot you or get the best out of you. Mother’s maiden name, date of birth might be some of this information so you need to stay awake before sharing any of this information to anyone.
3. Links in the Email: These messages usually consist of links from a very reputed organization online but you should not click on the link in any case as this could be communicating a lot of information.
4. Grammar: One of the excellent ways to get rid of such messages is to analyze their grammatical skills. These messages are mostly poor in grammar, spellings and punctuation.
5. Page layout: In case you are using any online service, make sure that the page layout and the protocols used are all credible as there are sources setting pranks for people in order to access their details. Any credible source will make a webpage properly ensuring that you get a safe and secure feel out of it.

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Your email address:

This is one of the important questions that might rise in your head and certainly this is a matter of concern to many people. Most of the times the email address is randomly generated as you will notice that you never came across with any services from the bank you are receiving your email from. Another source of email addresses is the mailings lists, web pages, chat rooms, and directories of social networks. Make sure that you don’t share your email addresses everywhere without analyzing the credibility of the source.

Immediate responses after you make the big mistake:

Once you make the mistake by any chance, you need to be prompt in coming up with the response. Inform your institution with the prank that you have just encountered and get their consent on the issue. You can terminate your account services for a while or so. Another step that can help is to change your pin or password instantly. Manage your account settings and change all the secret questions as well.

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The physical markets have turned into online markets lately and people have started adopting the online methods for purchasing a lot of their goods. This does help for most of the time as you need not to go to the provider for the goods or services rather you just place an order and you get the goods or services dropped right away. The online mode is safe and reliable but there are instances where people do fall victims to fraudsters. There are some symptoms as well as there are some immediate actions that you need to take just to make sure that you don’t lose much.

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Symptoms of Ecommerce fraud:

There are some typical cases where the type of fraud is quite the same. There hasn’t been any innovative frauds invented lately and there have been definite fraud cases so far.

These include:

• You buy something online but that is not delivered to the recipient’s address.
• You make a sale, deliver the object but you are never paid for that. The recipient does not pay you online neither on the delivery.
• The purchase you made was something different than what you got delivered in the package.
• You are being told that you won a lottery prize worth a million and for that you need to pay a few dollars as the processing fee. You pay the fee and you never get the million dollars.
• The business opportunity that you took part in was not as attractive and profitable as you expected before making the final deal.
• You help someone who seeks help from you in terms of cash and promises you to come up with a huge sum once his/her problems are sorted out but does not response after you send him money for help.
• You purchase software but that does not have a license or is pirated.
• You make an investment online that is marketed to you through email or website but do not get any response after the initial upfront payment.

Such events might have occurred in the past, of they might occur somewhere in the future until or unless you make the necessary actions once making a deal in the online world.

Actions available to you:

The moment you realize that you are dealing with something dangerous or scam, stop paying more money rather start thinking about ways in which you can recover your money back. Check the third party if that is available for a dispute resolution, this does not imply for most of the time as fraudsters run away the moment they are successful. In case you have purchased the stuff from an auction, see if the auction provider provides any dispute management option. Credit card payments can be requested for investigations. You can even check if you qualify for the fraud protection programs in case you paid through any online payment service such as PayPal. The best way against such a trap is to have complete record of every communication done. Take prints of the web pages, emails, record phone calls just so that you have the necessary information when required.

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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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Beware Visa’s warnings

Visa Inc. last week sent a fraud alert to banks and payment processors warning them to look out for a “large batch settlement fraud scheme” involving a merchant account in East Europe. That alert is focusing renewed attention on a longstanding need for banks to tighten up the standards for authorizing merchants who accept credit and debit card payments.

Batch settlement fraud schemes – What are they?

Batch settlements refer to the common practice where merchants store all authorized payment card transactions that occur during a day and then send them in a batch for settlement to their acquiring bank at the close of business. An “acquiring” bank, in payment industry parlance, is the financial institution that basically vets and clears a merchant to accept payment card transactions.

In its alert, Visa said it had received reliable information from a “third-party entity” that a criminal group planned to submit a large batch settlement through a merchant account approved by a bank in Eastern Europe. “The criminals claimed to have access to account numbers and the ability to submit a large batch settlement upload to occur over a weekend,” Visa warned.

The company said it had no details about who exactly was involved or when the fraudulent activity might occur. The alert noted that the people behind the scheme were likely a “consortium of online merchants that have been trying to secure processing arrangements after being shut down at several acquirers across many geographies.”

Viable solutions according to Visa

In an e-mailed comment, a Visa spokesman said that card issuers and acquiring banks routinely monitor for unusual batch settlements. Even so, it issued the alert as a reminder to “critical stakeholders so they can take cautionary or mitigating steps” against fraud.

The situation is largely a result of the relatively loose manner in which merchants are approved to accept payment card transactions. Credit card companies and acquiring banks need to tighten up their accreditation process and how they onboard new merchants.

There are also too many third parties and Independent Sales Organizations (ISO) acting on behalf of banks to approve merchant accounts. The standards for approval used by such organizations have allowed too many illegitimate merchants to establish accounts and access to the payment systems.

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We’ve gotten some emails about our post yesterday and we thought it’d be great to offer our readers even more methods to prevent credit card fraud for online merchants. Some friends who are seasoned online merchants have even stepped forward to let us in on common sense techniques to stop fraudulent transactions from hurting their business. Here are 5 effective tips that can help you prevent credit card fraud.

Tip 1: It pays to be suspicious
Be vigilant is scanning each order and watch out for information that may raise warning bells. These signs usually indicate fraudsters at work and you should scrutinize each transaction for credit card fraud.

Tip 2: Scrutinize each email address
Besides being suspicious of free email accounts like those provided by Yahoo! Mail, Hotmail and even Gmail, you should be able to spot and be suspicious of email addresses that contain random characters. They may be randomly generated. Also, try to see if the email address matches your customer’s name. Something is wrong if you have one “Jane Brown” placing an order with an email address like “jackie_blue459@hotmail.com”

Tip 3: Be wary of high-risk countries
Countries like Asia, the Middle East, Eastern Europe and Africa are classified as high-risk. While it’s not really advisable to discriminate against them all the time, it would be wise to practice precautions. Some merchants chose to disallow international shipping but if you do the same, you may miss out on a sizable chunk of business. Additionally, items shipped to port locations like Miami and Los Angeles may especially if a shipping mismatch has been detected. Fraudsters have been known to buy goods with stolen credit cards and shipping them off to other countries for a tidy profit.

Tip 4: Beware unusually high order amounts
If a customers orders 20 laptops that total up to tens of thousands of dollars, you may want to contact them and ask them for clarification. This is not a common purchase and if you have strong suspicions of credit card fraud, confront the customer or report this to the authorities before it’s too late.

Tip 5: Utilize IP firewall to block multiple attempts at fraud
Ask your merchant account service provider about additional information on IP firewall features. With this useful tool you can shut out fraudsters and prevent them from making multiple attempts at fraud once you’ve exposed them initially. Of course, some of the more resilient ones will try to use a proxy to mask their IPs but as long as you have set up roadblocks like a firewall, this will act as a deterrent for future fraud attacks.

Tip 6:

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As an online merchant accepting credit card payments, you have numerous security issues that you must be aware of for the safety of your business and your consumers. At this time, there are two main aspects of credit card security for credit card processing, including “AVS” and “CVV”. Both allow credit card transactions to be completed anonymously over the internet, and any merchant accepting credit cards online should require both forms of information of your customers.

Address Verification Service (AVS)
The “AVS”, or address verification service, is used to determine that the address provided by a customer matches the address associated with a credit card account. This helps generate confidence that the person who is entering the credit card details is the person who owns it. While the AVS is not required to process credit card transactions, when it is provided the transaction processor will send a response back with details of how much of the address provided matches the address on the credit card.

An online credit card payment will not be declined if the address is entered wrong, it becomes the merchant’s decision to decide what to do if the address only partially matches or not at all. You have the option of denying the sale, requiring the buyer to submit additional information, or giving them the opportunity to correct the address submitted, before processing the transaction.

Card Verification Value
The card verification value known as “CVV” and sometimes referred to as the CVV-2, is the three to four digit number found on the back of American Express, MasterCard and Visa cards. This number is never listed on any credit card statements or receipts, so that if an individual has found a credit card statement in the trash, they will not be able to complete a sale requiring the CVV code to be entered for verification purposes. The reason for this number not being listed on anything but the actual credit card itself, is when a customer is able to enter the CVV code, it is looked at by the processor as a strong indication that the customer has the credit card in hand. This increases the potential of the card belonging to the person who is attempting to use it to make a purchase online.

It has been proven that most all credit card fraud done online occurs when a thief has found a discarded receipt or someone’s personal credit card statement. By requiring the CVV code to be entered, an online merchant can significantly reduce that type of fraud from occurring.

If a CVV number is entered and is incorrect, the transaction will be declined by the credit card issuer.

Providing Your Consumers with Top Notch Security
If you are going to be accepting online credit cards payment for your products or services, it is very important that you provide your customers with a guarantee that you’re protecting their credit card information.
Credit card processing typically requires that the customer’s information is transferred about four times, which means there are four instances when someone could gain access to the cardholders details. When a customer first sends the credit card information to you via your checkout or web based form. You are solely responsible for security as the internet merchant, at this stage in the credit card transaction process. Having a secure server and a valid security certificate with the https protocol will protect and encrypt private information you receive from customers.

You will want to be sure that the credit card processing software you use, also known as a payment gateway, for your business is secure by using a reputable processing company with experience in online payments. As customer information is moved in and out of a database through the transaction process, the security must be top of the line and this is ensured by choosing a solid company that offers encrypted software for this part of the process.

Finally, when customer credit card information is viewed or handled by you or anyone inside your company, it is just as important that you ensure security at this stage as well.

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