eCommerce - Fraud Tips
As a Visa/Mastercard Merchant you are ultimately responsible for transactions that
you process through you merchant account. Please keep in mind that even with an
APPROVAL CODE there is a chance that the transaction is fraudulent (stolen
cards, identity theft, etc.). Please review the following information and
remain diligent in regards to reviewing orders processed through your Merchant Account.
The following tools are available to you for the purpose of determining the legitimacy of a transaction:
Address Verification Service (AVS) - Allows card-not-present merchants to
check a cardholder's billing address with the card Issuer. The merchant includes an AVS request as part of the authorization
and receives a result code indicating whether the address given by the cardholder matches the address on file with the
Issuer. This gives you an extra measure of assurance that the unseen customer is the legitimate cardholder. If
a customer cannot supply you with the credit card's billing address then it is an extremely high likelihood that the transaction is fraudulent.
Card Verification Value 2 (CVV2 & CVC2) - Is a three-digit number imprinted
on the signature panel of cards to help card-not-present merchants verify that the customer has a legitimate card in hand at
the time of the order. The merchant asks the customer for the CVV2 code and then sends it to the card Issuer as part
of the authorization request. The card Issuer checks the CVV2 code to determine its validity, then sends a CVV2 result back
to the merchant along with the authorization. It is an added security measure that can help you ensure that
the buyer has the actual card in hand. It is a simple procedure that should be incorporated into your eCommerce order process.
12 Potential signs of Card Not Present Fraud
Keep your eyes open for the following fraud indicators. When more than one is true during a
card-not-present transaction, fraud might be involved. Follow up, just in case.
- First-time shopper: Criminals
are always looking for new victims.
- Larger-than-normal orders:
Because stolen cards or account numbers have a limited
life span, crooks need to maximize the size of their purchase.
- Orders that include several
of the same item: Having multiples of the same
item increases a criminal's profits.
- Orders made up of "big-ticket"
items: These items have maximum resale value and
therefore maximum profit potential.
- "Rush" or "overnight" shipping:
Crooks want these fraudulently obtained items as soon
as possible for the quickest possible resale, and aren't
concerned about extra delivery charges.
- Shipping to an international
address: A significant number of fraudulent transactions
are shipped to fraudulent cardholders outside of the U.S.
- Transactions with similar account
numbers: Particularly useful if the account numbers
used have been generated using software available on the
Internet.
- Shipping to a single address,
but transactions placed on multiple cards: Could
involve an account number generated using special software,
or even a batch of stolen cards.
- Multiple transactions on one
card over a very short period of time: Could be
an attempt to "run a card" until the account is closed.
- Multiple transactions on one
card or a similar card with a single billing address,
but multiple shipping addresses: Could represent organized
activity, rather than one individual at work.
- In online transactions, multiple
cards used from a single IP (Internet Protocol) address:
More than one or two cards could definitely indicate a
fraud scheme.
- Orders from Internet addresses
that make use of free e-mail services: These e-mail
services involve no billing relationships, and often neither
an audit trail nor verification that a legitimate cardholder
has opened the account.
If you have any questions regarding fraud, or suspect that a transaction you are processing may be
fraudulent please do not hesitate to contact the EMS Risk Department 800-726-2117 ext. 7.
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