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June 27, 2018
June 27, 2018
Credit card fraud is a costly problem, with businesses losing billions of dollars every year to bogus transactions both online and in-person. Not only does credit card fraud lead to lost merchandise but also to lost time — and major headaches — spent straightening everything out.
Although banks and credit card issuers are constantly working to fight fraud, often adding features and security protections to cards to protect both customers and businesses, merchants still have a responsibility and the power to stop fraud before it happens. Criminals are becoming more sophisticated all the time, but there are still a few telltale signs that should trigger a closer look at certain transactions.
Fraud Detection Services
One of the most important things to do to protect against fraud is to work with a credit card processing company that offers advanced fraud detection. Some companies use big data to evaluate transactions against known fraudulent accounts; when a card is associated with fraud, information about that card is then added to a database against with future transaction can be evaluated.
Credit card processors also offer advanced detection tools that help protect again fraud in card-not-present transactions (i.e., online purchases). Using tools built into cards themselves, such as Address Verification Service, Card Validation Codes and Card Verification Values, your processor can flag suspicious transactions right away before you have a loss.
Identifying Signs of Fraud
Fraud investigators have identified several red flags that are often associated with credit card fraud. Obviously, not every transaction that meets one of these criteria is a fraudulent one, but if you spot any of these warning signs, it's worth doing some more diligence before processing the transaction. Chances are, your customers will be appreciative of your efforts — especially if you catch a problem.
Among some of the telltale signs of fraud to watch for include:
Again, these are just some of the signs to watch out for — and don't all automatically equate fraud. Still, many bogus transactions follow these patterns, so it's best to be alert.
Training Your Employees
If you own a brick-and-mortar business, training your employees to spot signs of fraud and respond is important as criminals still attempt to steal in person. Remind your employees that they should never confront or accuse a customer of fraud; most credit card companies have a dedicated fraud line that merchants can call and ask for specific code, which triggers the issuer to walk the caller through the steps to confirm the transaction.
Of course, you must train your employees on how to be alert to signs of fraud first. Some of the things to watch for include:
As long as there are credit cards, there are going to be thieves attempting to commit credit card fraud. By being alert and taking steps to confirm suspicious transactions, you can stop them in their tracks and keep your business from losing money.