Credit card fraud is a serious problem, and unfortunately online merchants are one of the most popular targets for fraudsters. It’s easier to be quick and remain anonymous while testing credit card numbers on various online sites rather than attempting to present a stolen card at a brick-and-mortar business and risk being caught red handed. Many small to medium size businesses aren’t taking any precautions to avoid becoming a victim.
Here are some simple tips for preventing and tracking potentially fraudulent credit card transactions on your website:
- If outsourcing your shopping cart to a third party, use a secure, professional service.
- If you manage your own shopping cart, make sure you keep your software up to date.
- Make sure that you are completely compliant with PCI Data Security Standards.
- Enable Address Verification and Credit Card Code Verification in your shopping cart.
- Use shipping tracking numbers for all orders.
- Collect ISP (Internet Service Provider) information for all orders, and compare the geo-locations to user-submitted addresses. A difference in location could be a warning sign. This might now always indicate fraud though as sometimes a person might use a card registered to another city.
- Use https://whatismyipaddress.com to verify an IP address to a physical address.
- Check to see if a proxy server was used for a transaction that keepings a buyer anonymous. This is a red flag but also not a sure indication of fraud.
- Check the validity of shipping and profile information: phone numbers with correct area codes that match the shipping or service address.
- Set up an alert system and train your employees to check for suspicious activity, like a huge number of purchases or many different card numbers being used in the same time period from the same IP address.
While these tips are not to be considered a clear indication of fraud, they should certainly be treated as red flag warnings and warrant further investigation before delivering product or service.