The sad fact is, that once you start selling online you will inevitably come up against fraudulent transactions and its important to know how to recognise and deal with them. Depending on what industry your in will depend on how many fraudulent transaction you receive – when I sold Plasma TVs they were almost daily and I only got caught out once in 2 years thanks to the information I am about to share with you.
If you have picked a good payment processor they will offer you some advice as to whether a transaction is suspect or not usually be telling you if the address, postcode and CVV number match the details held for the card holder. If you have 3 green lights for those details that’s usually good enough but you should also be looking at the following:
- Are the billing and shipping address different?
While this isn’t always a danger, look out for if the addresses are in a completely different town or city. - Are the billing and shipping address names different?
Sometimes this is because the thief is using the card owners name and address so the card goes through ok and then having it shipped to them or a friend, usually with a fake name. - What is their email address?
Believe it or not this is often the biggest tell tale. If they are using an email address that comes with their broadband provider together with their name in it such as john.smith@btinternet.com or john.smith@verizon.com that’s good news because you know they are easily traceable and they obviously aren’t trying to hide anything. The dangerous ones are when you see their name is John Smith but their email address is something like “salavtore4450@hotmail.com” i.e. a free internet email account that could be anyone and with a name that has nothing to do with their supposed real name. - Have they used a landline number or a mobile number?
A landline number is always a good thing as again a fraudster knows they can be easily caught by giving out a landline so they usually stick to a mobile. If you have just been given a mobile number and some of the other information given in the order looks decidedly dodgy then call the number and see what happens. You may find it gets answered by someone with a distinctly foreign answer, yet their name is on the billing details as “John Smith” or the number doesn’t even work, either way run for the hills and cancel that order! - What have they ordered?
Another tell tale is when they have ordered the most expensive of whatever it is you sell, perhaps an item that you don’t often get orders for. Fraudsters will always try their luck and get the most out of you they can!
When you have detected an obvious fraudulent order I recommend you simply refund the card and do not send out the order – even if they are cheeky enough to ring up and chase it. Yes, believe it or not, we have had fraudsters actually telephone us asking where their order is!
If you don’t refund the card then 9 times out of 10 you can expect the dreaded letter coming from your bank stating that they have removed the money from your bank account as the card holder has no knowledge of the transaction and they believe it to be fraudulent. This is called a chargeback and banks don’t like you having them as they make you look like a bad risk so try and avoid them by being careful who you send your products out to.
Another way you can protect yourself is to make sure your payment processor supports 3D secure. 3D Secure shifts liability for charge backs away from the Merchant where the cardholder claims fraud or non-participation – including transactions where the cardholder has not yet enrolled for 3D Secure or where the issuer can’t support it. That amounts to a massive 70% of all charge backs for which you are no longer potentially liable and that has to be a good thing!
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