Micah Waters asked:




Every year, fraudulent credit card purchases cost online retailers millions of dollars. Without the benefit of scrutinizing a customer and requesting additional identification in person, it can be more difficult to properly identify fraudulent charges made online. However, with a little extra time and effort, online merchants can significantly minimize their risk to fraud using the following strategies.

1. If the shipping address doesn’t match the billing address, call the customer directly to confirm the order, especially if the listed shipping address is out of the country.

2. Always require a valid phone number on orders and ensure the area code of the number matches that of the billing address. Consider calling the customer to confirm the number.

3. Be suspicious of atypical orders, such as unusually large orders or orders for an exceptionally high amount of the same item. If an order seems suspicious, conduct a little more research to determine whether or not the order is fraud.

4. Other transactions to be wary of include orders purchased using multiple credit cards but shipped to one address. Or multiple orders made with the same credit card within a short period of time.

5. Check the IP address of the customer placing the order to determine their location. Be wary of international payments that originate from “high-risk” countries or areas that are known for their high-rate of fraud, including Nigeria, Turkey, Lithuania, and Russia.

6. Scammers will often use untraceable email addresses originating from free web-based services. Ask the customer to provide an ISP or domain-based email address that can be traced to their location.

7. Use the Address Verification Service (provided by most payment processors) which ensures the information provided by a customer matches the information the bank that issued the card has. Many payment gateways also have a variety of other fraud prevention tools you can use to minimize your risk.

8. When in doubt, call the customer and request the customer fax a copy of the driver’s license or passport to authenticate their identity.

9. Make your anti-fraud policy clearly visible on your website and warn potential fraudsters that they will be pursued to the fullest extent of the law if the place fraudulent orders through your website.

10. You can also call the issuing bank prior to authorizing the order.

Darryl