Learn to identify the warning signs of card-not-present fraud before it impacts your business. This guide covers the most common indicators fraudsters use during online transactions.
In today's environment one of the key issues that eCommerce merchants face most prevalently is fraud. Those who commit fraud may be looking to gain products free of charge but more often than not it is an attempt to obtain funds illegally. There are many forms of fraud including but not limited to identity theft, fake credit cards, and stolen credit cards.
Though it may not seem prevalent, fraud leads to millions of dollars of lost profit every year. It is key to require the address of the cardholder along with Zip code and CVV during a transaction. Authorize.Net provides a fraud detection suite that can assist in implementing these features.
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.
Criminals are always looking for new victims.
Because stolen cards or account numbers have a limited life span, fraudsters need to maximize the size of their purchase.
Having multiples of the same item increases a criminal's profits.
These items have maximum resale value and therefore maximum profit potential.
Crooks want fraudulently obtained items as soon as possible for the quickest possible resale, and aren't concerned about extra delivery charges.
A significant number of fraudulent transactions are shipped outside of the U.S. Visa/MC address verification (AVS) can't validate non-US addresses except in Canada and the United Kingdom.
Particularly useful if the account numbers used have been generated using software available on the internet.
Could involve account numbers generated using special software, or a batch of stolen cards.
Could be an attempt to "run a card" until the account is closed.
Could represent organized activity, rather than one individual at work.
More than one or two cards from the same IP address could definitely indicate a fraud scheme.
These services involve no billing relationships, and often neither an audit trail nor verification that a legitimate cardholder has opened the account.
With a bit of due diligence you can secure your business interests and protect your funds. Authorize.Net's Advanced Fraud Detection Suite (AFDS) can help automate many of these checks. Learn more about fraud prevention tools →
START includes Authorize.Net's Advanced Fraud Detection Suite with every merchant account.
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