Fighting Fraud – Before, During and After the Sale

The holiday seasons always seem to come with an increase in fraud. This year has been no different. The luxury ground transportation industry has been hit particularly hard this season and there have been some lessons learned and lessons shared. We want to be proactive in educating you and your employees on the perils of accepting phone orders.

Before the sale

  • Engage a trustworthy merchant services provider with a solid reputation within your industry
  • Use a processor who builds true relationships with clients and understands your operations
  • Make sure technical support is available 24/7
  • Make sure you are PCI Compliant at all times

Fighting Fraud

  • Avoiding becoming a victim of credit card fraud means being ALERT
  • Train your staff on what to LISTEN for
  • Listening is the biggest tool for avoiding fraudulent transactions

Indications of Fraud

Fraudsters say things and take actions that should be considered clues that their transaction is fraudulent. Here are common indicators of fraud:

Suspicious phony name

Always be suspicious of names like John Smith, Bob Brown, Susan Jones. Just because they have a common name doesn’t always mean it’s a fraudulent sale, but it should get your fraud senses on high alert.

Wrong or missing Security Code

If your client doesn’t know the 3 or 4 digit security code on their credit card, this means the card is not in their possession. This should be a MAJOR red flag. The security code is specifically intended to prevent fraud. Use it!

Use the AVS Verification

Always use the Address Verification System for every transaction. If the address numbers don’t match the exact address on the billing statement, the AVS will display a “mismatch”. Always enter the zip code as well. If one or both parts of the AVS system are mismatched, proceed with caution.

Abnormal Orders & Gut Feelings

Not every abnormal order is fraud. However, when you hear a very young sounding voice ordering $1800 worth of service, this should be a red flag. If the order seems unusually high or is filled with unusual special requests like adding bottles of alcohol or other goods to be charged to the credit card, it could be fraudulent. Trust your gut instincts. If it doesn’t feel right, it probably isn’t right.

Overly Friendly or Distracting

If someone is overly friendly or seems like they are trying to distract you, it may be a fraudulent transaction. Remain focused but polite and no matter how nice someone seems, always follow the same procedures. Do not get caught up in the game.

Add-On After the Order

If a customer is insistent that you run a credit card while they are on the line, this is another MAJOR red flag. They want to see if the card is going to go through. If it does, they are likely to add on more to the order knowing that the stolen credit card was a valid card. Thieves always get greedy and most normal people don’t even discuss when you will actually charge the card. It simply doesn’t come up in conversation.

Pick-up Location is Odd

If a customer wants to be picked up in the parking lot of a Walmart, this could be an indicator of fraud. If you are asked to pick-up at a hotel, ask your client if they are a registered guest of the hotel. If they are not, this should be a red flag and you should proceed with extra caution.

Other Protection Steps

The most important step you can take to protect yourself is getting a signature on an order form.

  • The signature can be compared by the issuing bank BEFORE service is rendered.
  • The signature is an acknowledgment of the transaction and usable in court if needed
  • Have the client fax or email a signed copy of the sales order.
  • Have the client sign a Credit Card Authorization Form if you don’t have a sales order to sign.

Employee Training

By training your employees to recognize suspicious orders, you can take action BEFORE you sustain a loss.

  • Detecting a fraudulent order is winning the battle.
  • Use the Merchant Hotline to call in a CODE 10 – suspicious order. This will cause the bank that issued the credit card to call their customer to verify it is them.

Handling a Chargeback           

Despite your best efforts, a fraudulent charge may result in a chargeback.  Cardholders can dispute a charge up to six months after the transaction date.  All is not lost……

  • Have your refund policy in WRITTEN FORM.  Make sure it’s on your website, sales orders, trip tickets etc.
  • Contact the client to confirm any potential misunderstandings
  • Respond quickly to Retrieval Requests sent to you asking for additional information
  • Provide your credit card processor with copies of everything you think is relevant to the transaction.
  • Allow your processor to assist you with the chargeback and submit documents on your behalf.

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