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Ripped Off by a Customer - Part One: Signs of Fraud
Article
by Esources Editor
April 23rd 2007
Examining common signs of fraulent transactions
You have just received a large quantity order for one item that a customer wants sent overnight. You note that the billing address is not the same as the delivery address and that the consumer has a free e-mail account. It's one of the largest orders you've seen in a long time and you get right to the task of shipping it out.
Wait a minute, not so fast. You may want to do a few things to protect yourself.
The fact is the scenario above has four warning signs that should alert you to the possibility that the person ordering your wares is doing so with a stolen credit card. The four signs are:
- It's a large order of one item.
- There's a rush put on the order.
- The billing and delivery address do not match.
- The customer is using a free e-mail account.
Any one of the above four signs are indicators that you're in danger of being ripped off; all four together are a recipe for losing your shirt on the order. Here are a dozen behaviors or instances that should raise concerns about an order.
- Large orders of one item or orders that cost a lot are indicators that someone may be using illegal means to procure your products. A person using a stolen credit card has a small window of opportunity during which they can score, and so they will try to steal as much as they can as quickly as they can.
- Rush or overnight orders, especially when quick-shipping costs don't seem warranted, are suspect. If someone is willing to add a large percentage of cash to their order, they may be doing so to get it into their hands before you can become suspicious.
- If the billing address and delivery address do not match, it is not certain that someone is trying to steal from you; there are many legitimate reasons for shipping to another location. However, if a customer is having the order shipped to a hotel or they hold a credit card based in a country other than the one being shipped to, you should be concerned.
- The customer's e-mail is through a free service. Free e-mail addresses are easy to establish and often tough to trace. Again, someone using a free e-mail service is not necessarily a crook but if someone is doing so, look for other signs and check them out in other ways.
- A confirmation e-mail for the order is sent and it comes back as being undeliverable. If the customer made a mistake on their e-mail, they will contact you. If they are trying to get something for nothing, they will not.
- You cannot verify the shipping address. If you cannot verify who, if anyone, lives at the particular address then hold onto your products.
- You are unable to confirm the phone number. These should match-the phone number listed for the card holder and the number that they provide to you.
- The buyer requests that the order simply be left at the door. This type of thief may know where the cardholder lives and can easily pick-up the order when it's left on the doorstep.
- You have not received all of the necessary information regarding the purchaser. The reason you want this data is to be able to confirm identity and the reason someone will not give it, is to ensure that you can't confirm who they are.
- Orders from the following countries are often fraudulent-- Romania, Indonesia, Singapore, Ghana, Ukraine, Uganda, Nigeria, Hungary, Belarus, Estonia, Latvia, Lithuania, Slovak Republic, Russia, Yugoslavia, Macedonia, Philippines, Thailand, Malaysia. Many retailers simply won't ship to these locations. If you decide to offer your products to these countries, make sure you verify all information prior to shipping.
- The IP address (Internet Protocol address) for the user's e-mail is from a network provider on a continent different than the billing address for the credit card. Why would someone living in California be ordering via an Asian-based web provider? The answer is they probably wouldn't and that the card is likely stolen.
You are asked to ship to a postal box. These can be impossible to trace and are opened and closed easily. Only send your products to a home or a business.
Some of the above warning signs simply indicate that you should do some checking, while others are real deal breakers. Never send anything to anyone until you are certain that they are legitimate. Once someone rips you off, it can be impossible to recoup your money or your product. In part two of Ripped Off by a Customer, we'll focus on steps retailers can take to ensure they're serving honest customers and filling valid orders.
Ripped Off by a Customer - Part Two: Protecting Yourself Against Fraud
Article
by Esources Editor
April 23rd 2007
Protecting Yourself Against Fraud
Above we considered 12 signs of credit card fraud of which retailers should be aware. In this section, we will examine 10 ways in which you can protect your business against dishonest consumers. Above all, retailers must use common sense to guard against being ripped off. Look for the warning signs as discussed in the first part of this article and utilize the following strategies to ferret out potential perpetrators.
- This first one is simple but important. Educate yourself and all employees about fraud, including signs that indicate illegal activity. Develop a clear, written policy for how to proceed when fraud is expected. One thing all retailers must be careful about is overreacting to suspicious activity. You do not want to accuse anyone of fraud who is acting honestly. Additionally, you don't want to put a good customer on the spot and embarrass them or make them angry.
- On your site warn potential thieves that you screen diligently for credit card fraud and that you take legal action against all cheaters. Include a simple phrase announcing that you are alert to and vigilant against all fraud. This will help keep scam-artists at bay. Also, in order to maintain security, be sure that you put into practice that you've stated.
- An Address Verification System (AVS), which matches the postal code and street address submitted by the buyer with that of their credit card, can alert you to mismatches for clients within the UK. If there is a mismatch, often merchants simply void the transaction. However, you could opt to investigate further.
- Always send a confirmation e-mail. If it comes back as undeliverable, then you know you've got a problem, and you should not fill the order.
- If you are suspicious even after successfully sending a confirmation e-mail, then e-mail the buyer and request the name of the bank that issued the card and the phone number for the card, which is located on the back. You can explain that this is part of your fraud protection service, ensuring that their credit card is being used properly. If someone is trying to rip you off, you'll never hear from them, because they will know that you are onto them. If they are the holder of the card, you'll get the information. Once you get it, follow through on your procedure by checking with your credit card processor, making sure the bank name is correct. Another option is to use the 0800-number to call the issuer of the credit card and inform them of the transaction. You can then request that they call the card holder to confirm the transaction. Most credit card companies will be happy to do this.
- Contact the customer to double check the expiration date on the card and the CVC2 code. The expiration date is on the front and the CVC2 code is a three digit code located on the back of the card just after the card number. Explain to the consumer that you are double checking these numbers as a security measure. Scammers tend to use many cards at once and will be confused or may simply panic and never answer your request.
- Call the shopper at the phone number provided to confirm the order. The phone number may be fake, which means that the deal is off. If you get the holder of the card, you'll be able to confirm the order or inform them of the illegal activity.
- Don't accept international orders of over £250 without following through on all of the investigative strategies discussed. Call and confirm all domestic orders over £250.
- E-mail a customer that you suspect and tell them that you have another item that they can use (specifically name the item) priced at £300. Chances are if they are ripping you off they won't worry about spending the money and will take you up on the offer very quickly. Perform further investigation if this occurs.
- Put a tracking field into your online order form. This area will record information about the computer used for the transaction, including IP address (Internet Protocol address) and domain name of the server. If you find that the order is fraudulent, you can contact the Internet Service Provider (ISP) and alert them to the problem.
- Ask your credit card processor to sign you up to additional verification services offered by credit card providers. These include Verified by VISA and MasterCard Secure Code.
These 10 methods of investigation should serve you well. Don't ship any item until you are sure that you have a valid customer. If for any reason you are uneasy about the purchase hold back sending it. Only complete the order once you are convinced it is genuine. Implementing these steps will aid in the financial health and reputation of your business.
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