Top 20 Merchant Fraud Prevention Techniques

Fraud is a serious concern for anyone setting up merchant accounts. If you want to avoid fraud, here are twenty considerations. Some of the top 20 merchant fraud prevention techniques apply only to online merchant accounts while others can only be used in retail. Either way, they will help ensure that your business avoids potential credit card fraud.

1. Make sure your provider is PCI compliant.

There are standards set out for all merchant account providers to follow. Make sure your merchant accounts align with these standards.

2. Have online customers sign up for an account.

Having online customers sign up for an account can help you to verify information and better track orders, which can help you avoid fraudulent transactions.

3. Use IP address for geo-location.

Check where the order originates from. Using geo-location is one of the top 20 merchant fraud prevention techniques to identify any redirection attempting to fool your servers.

4. Look out for proxy servers.

Avoid any orders placed through proxy servers, as they can give false information.

5. Watch out for difference in IP address country and billing address country.

Compare the address of the IP address against the billing address of the transaction.

6. Look out for high risk countries.

Just like when you set up your merchant account and had to be aware whether you were a high risk business, look out for high risk countries.

7. Be wary of free or anonymous e-mails.

This sort of email listed in the top 20 merchant fraud prevention techniques will be very difficult to track should there be fraud involved.

8. Check that the phone number is valid and matches up with the zip code.

Make sure not to accept invalid phone numbers, as they may be needed for verification.

9. Make sure the credit card has the same billing address country as its issuing country.

One way people perpetrate fraud is to get a credit card issued in another country. Make sure to be wary of this trick.

10. Check with the issuing credit card company to verify its validity.

When in doubt, call the issuing company to make sure the card is valid.

11. Verify order with a phone call.

If a customer places a questionable order online use one of top 20 merchant fraud prevention techniques to call that person and verify information.

12. Ask customer to show picture identification.

When the customer swipes a card, have your cashier check the name on the card against photo identification to ensure it is their card.

13. Check the card signature against the paper signature.

Always look at the credit card signature when you can and compare it to the paper signature.

14. Be wary of a customer with one bad card.

When in a retail environment, if your customer swipes a bad card, make sure you check the name on that card and then compare it with the name on the other card he swipes. This person may have multiple stolen cards and is trying to find one that works.

15. Watch out for next-day delivery.

If an online client is ordering an expensive item with no inherent rush needed, one of the top 20 merchant fraud prevention techniques is to be wary of them asking for next day delivery and take extra caution.

16. Always be suspicious of duplicate orders.

When a person places two identical orders online, look into the details and make sure it is not a mistake.

17. Exercise caution with debit cards being run as credit cards.

In a retail environment, always make sure to pay extra attention when someone uses a debit card as credit. This could be to avoid entering a pin.

18. Do not accept partial information.

For online orders, make sure the customer enters valid information across the board, including: phone, address, zip, verification code, etc.

19. Employ a negative database.

This has nothing to do with the mood of your database. A negative database in this case simply means you create rules to look for and help identify possible fraudulent cards.

20. Monitor your merchant account closely.

Aside from the customer trying to cause fraud, one of the top 20 merchant fraud prevention techniques is to watch out for someone trying to access your merchant account to cause trouble from within. Change your password quarterly, or even monthly, to avoid any potential security breaches.

If you have questions or would like to learn more about merchant account fraud prevention, please contact a representative at Transparent today.