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How to Protect Your Business from Credit Card Fraud
Everywhere you look there is information on how individuals
can protect themselves from credit card fraud. This information can be found at
banking institutions, libraries, on TV, on the Internet, its everywhere.
However, that isn’t the case for businesses. How can your business protect
itself from these fraudulent individuals who make purchases for products or
service online or over the phone? Like most business, you may ship the products
before discovering that the credit card is stolen. In this case, your company
suffers the bill and the true owner of the credit card cannot be held reliable.
Nevertheless, these are the steps to protect your business
from fraudulent individuals and avoid this terrifying situation.
- It is
important that you gather all the information associated with the credit
card. This can be done by requesting all of the information exactly as it
is shown on the card. This information includes: The cardholder’s name
(Exactly as shown on the card, including middle name or middle name
initial). Request all 16 digits on the credit card. Request the credit
card verification number. This number is the last 3 or digits located on
the back of the card after the account number. Request the expiration date
on the card. Request the billing address for the card which in most cases should not be a P.O. Box. Requesting this information is very
important. The fact is that most card thieves only have the card number.
They will not have any other information associated with the card. By
having all of this information you will be able to utilize address
verification services. Address verification service compare the billing
address given by the customer to the banks database and alerts the user if
the addresses are different.
- Pay
particular attention to customers who list a different billing address and mailing address. In some
cases, card thieves may also have the cardholders ID. In this case they
will be able to supply the billing address; however, request for the
product to be sent to a different address. You may opt to call the bank of
the credit card and ask them to call the cardholder to verify the
purchase.
It is definitely advised not to
ship orders internationally with a different billing and mailing address.
- In
most fraudulent cases, the card thief will request a next day delivery.
They want to get the product fast and without being caught. This is a red
flag and should be carefully observed. If the order is larger than your
typical orders, most definitely question it. Remember, the card thief is
not concerned about how much he/she is spending; it is not their money.
Most likely, he/she needs a large quantity for resale.
- As a
business owner, you want to do everything it takes to protect your
business from fraudulent activity. It may be resourceful to have all the
information collected validated by the customer. Since you are not meeting
with the customer directly, it is wise to request that the customer fax
you a copy of the credit card and photo id. This may seem extreme, but not
as extreme as been taken for thousands of dollars in products. This
precaution should most definitely be exercised for large orders involving
heavy sums of money.
- If you
do find yourself a victim of this fraudulent activity, take immediate
action to reduce loss. - Immediately
inform your local police department. Make sure to answer all the
questions the police may ask and give them all the information that you
have. - Contact
the bank of the credit card. Request that the issuing bank calls the
customer to inform them of the situation. Make sure to give the issuing
bank all the information that you have. Including, the billing and
mailing address the card thief submitted. When the cardholder calls your
company, explain the importance of the situation and why it is vital that
he or she also reports the incident to the police.
By following these steps you are taking the necessary action
to protect your business from credit card fraud.
