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2016-05-18 00:00:00Money & FinanceEnglishCredit Card Fraud Credit Card Fraud

Detecting Credit Card Fraud

3 min read

To understand the dynamics of preventing credit card fraud, small businesses should understand how online fraud emerges and what are the immediate tasks that enable a business to have fraud protection and ultimately keep the business safe.

Large amounts of money are being siphoned out of businesses and the susceptibility to credit card fraud is more complicated due to lesser oversight, minimal staff and the absence of rules and practices. Almost $190 billion is a resultant of credit card fraud each year.

Nearly 50% of companies surveyed by PriceWaterhouseCoopers accounted that their firm was a victim of credit card fraud. According to Indian cybercrime statistics, there has been an increase of 90% of credit card fraud cases this year in contrast to the previous year. We will now take you through five essential steps to detect credit card fraud:

Stay cautious of shipping information:

Ensure that expedited shipping addresses should not differ with respect to the billing and shipping addresses. Keep a note of the IP location and be certain that it matches with the credit card address details.

This should also determine whether there is a break in the spending patterns based on location, purchased items, spending amount, spending frequency, whether a large purchase was made after a smaller one and digital origins.

Small businesses should understand that fraud should be detected at the source: employees, customers, contractors and third-party attacks.

Take note of suspicious email accounts:

When your small business is utilizing a credit card, ensure that you do not provide information to unknown and suspicious email accounts that demand your business credit card credentials. Always review and research the suspected address to know more about the organization instead of ignoring the organization and falling prey to related email accounts of the organization.

This will ensure that your small business is aware of prevalent credit card are frauds and not partake in it.

Maintain a record of credit card numbers:

By creating a repository of credit card details, you can prevent credit information from falling into the hands of fraudulent organizations and to account for all credit card details and information to track purchases and payments made by your business.

Utilize tracking number and verification measures:

Every credit card has a shipping order attached to it and you can track the location and validate the order. Additionally, if your business website has strong security measures, any breach can be reviewed and tracked.

Small businesses’ anti-fraud policy should include validation anti-fraud work practices that review fraudulent activity, create written procedures that determine work processes in critical financial areas and introduces checks and balances for payments.

Employ a fraud profiling service:

Small businesses should reduce the total number of transactions that have been declined and must constantly use the security code. This security code is typically a three-digit number printed on the back of the card that includes CVV2, CVC2, and CID.

Tools that can be employed are Address Verification System (AVS) and Credit Card ID, also referred to as CVV2 or CVC. Small businesses should enable a Tokenization service, where sensitive payment data would not be stored on the business’ local operating systems. With this service, your business will be protected against fraudulent practices.

In case of credit card and online fraud, your business should take precautionary measures by reporting the fraud to the police, the issuing bank and request a fellow co-worker to call the cardholder that is registered to the transaction. This would allow your business to be protected and more than detecting the credit card fraud, you can be protected from fraud by engaging with tools and law enforcement agencies.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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