Shanu Singh Guliani

Avoiding Online Fraud
March 22, 2007

If you accept online orders and would like to greatly reduce your exposure to credit card and check fraud, implement these simple tips to improve e-commerce security for little or no cost:

1. Address Verification System. Provided by most merchant processors, an AVS (Address Verification System), runs every time an order is placed. AVS matches the information the customer gives you with the information on file with the card-issuing bank.
2. Shipping, Contact Information, Email Provider. Screen orders to make sure that the billing and shipping addresses match (although if the item is being sent as a gift, the shipping address may well be different). Be weary of shipping addresses to a P.O. Box rather than a standard business or residential address. Can the customer be reached by the phone? Is the number missing or incorrect? Does their E-mail confirmation go to a free Web account rather than one connected with an Internet service provider?
3. Order Amounts. Take special caution when receiving
   noticeably high orders. Is the order total surprisingly large for your business?
4. Card Verification Codes. If you’ve ordered merchandise online or over the phone in the past few years, you’ve probably had to provide not only your credit-card account number, but a short security code as well. Ask the same from your customers, if they have the code, they are probably holding the actual credit card. This is not a guarantee just another layer of security.
5. Checks. Ensure that your fraud prevention is not limited to credit-card orders. Checks and Western Union transfers also have a high incidence of fraud.

None of these circumstances necessarily means that somebody is trying to commit fraud on your website. However, if you find several of them associated with a single order, it’s probably a good idea to investigate further before accepting the charge and shipping off your merchandise.

Posted by Shanu Singh Guliani on March 22, 2007 | Comments (0)