How to Detect Fraudulent Credit Card Orders and Prevent Them

Today businesses have shrunken and operate with fewer employees and are totally internet driven. With the increase of internet users, the potential market of online business has also grown, along with this the risks of phishing, online frauds or fake websites have also grown. Secured online payment is a conce
for both the customers and the retailer. If you sell products online and accept credit cards perhaps you might have already faced credit card fraud. Fraudulent orders often results in huge losses: refunded sales, unsatisfied customers calling you and asking why you have charged the credit card. Such orders bring a lot of chargebacks: your merchant account can easily be terminated, you get chargeback fines and so on. In order to prevent credit card fraud you must check each and every transaction that goes through.
These are the most important things to check on an order to see if it is a legitimate order:
1. Checking the IP address of the customer is very important procedure, as IP address is an unique identifier on a network, issued by the Internet Service Provider. For i.e. if customer submits an order that has the USA billing address, but his computer’s IP address is from some African country – this raises a red flag.

2. Check customer’s real name and e-mail address. Often fraudsters enters one customer’s name for i.e. John Doe, while the e-mail address contains completely another name, i.e. JamesSmith@email.com . Possible fraud!

3. Analyze your webservers and merchant account’s logs to see if there were multiple attempts to order the product. Usually scammers have many stolen credit cards and try to use them to order the product. They enter one card number, it gets declined, then they enter another one that has a completely different customer’s name, it gets declined, so they take the 3rd card and try to order again until they get a success. Multiple attempts to order the product with different credit cards – huge fraud risk!

4. The email address awareness is also an important factor. Since the fraudsters rarely use a real email address – usually they use fake e-mail addresses – non-existent ones. So if the purchase confirmation e-mail sent to a customer bounces back to you – make sure to check the transaction more thoroughly. Huge possibility of fraud.

5. The shipping address must meet the cardholder’s entered address. If shipping address is different to the one entered by the cardholder – this displays a fraud possibility.

6. Whenever there is a doubt during the credit card processing, the credit card company or the holder must be called. The idea is to verify the customer – call a customer via phone and say ‘thank you’ for the order. This way you can see if the customer is a legitimate and if he has ordered the product.

There are many other factors that you could check when screening the orders, however, it is really hard to check and every transaction manually. These are just the simple guidelines on how to check the orders… Big online businesses have hundreds and thousands of orders per day, so it becomes impossible to check each and every transaction. That’s why such companies use payment processors that provide automated fraud screening – credit card anti-fraud solutions. One of such companies is Click2Sell. It provides the credit card processing services, but at the same time all orders are checked with hundreds of various parameters to see if a transaction is a real – legitimate customer. So you don’t have to manually check transactions yourself.

Make sure you use a good payment processing company that not only processes your card payments, but provides a real antifraud protection. This way your online business will be profitable and you won’t face any fraud related costs.