Credit Card Fraud Prevention

Written by on June 18, 2013 in Money - No comments | Print this page

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credit_cardsOne of the most important factors in achieving ultimate success in the e-commerce market is making sure your e-commerce activities include a good program for credit card fraud prevention.

Any good credit card fraud prevention program with have geolocation technology built into the system that tries to protect against erroneous use.

This will automatically determine what unique IP address the buyer is using at the time of the purchase. With the IP address, the program can determine the country of origin and the precise geographic location of the buyer and this can play a big part in determining whether the purchase will go through or not.

Dependent on the IP information, additional layers of security may be added to prevent fraud if the system flags a potential high risk buyer.

For example, if there is a great distance between the billing address and the actual location of the buyer, this may trigger additional security questions or even prompt the merchant to make a telephone inquiry to the bank and/or the buyer.

Another example would be if the buyer is located in a different location than where he or she is asking the product to be shipped. The geolocation information can also be used to determine if the country is in a particularly high risk category.

For example, Indonesia and Romania are both considered high risk because a lot of international fraudsters are located there. If the buyer is from a high risk country, the merchant can set up the program to not accept those orders or add additional security screens to the order.

There are several other factors that may trigger a good credit card fraud prevention program to add an extra layer(s) of security measures.

For example, buyers using free email accounts such as Yahoo Mail, Gmail, and Hotmail may need to be out under additional scrutiny. Those buyers who make purchases using P.O. boxes may need to verify by phone their physical address.

Mail forwarding businesses have become a big industry for people living in countries where the major online shopping sites will not ship to. In these cases, the transaction may be legitimate but it should probably trigger an extra layer or two of security for the order to pass through.

Some companies may wish to simply disallow transactions that go to known mail forwarding addresses. Another security check is to see if the phone number matches the zip-code of the physical shipping address. If not, the merchant can and should ask for additional information.

When merchants have major doubts about a transaction, they can always request that the customer fax them a copy of their photo ID and other pertinent information. These credit card fraud prevention programs allow the merchant to customize the layers of security needed to avoid this to suit their particular business.

With today’s new breed of highly-tech savvy criminals devising ever more complex systems to get what they want, eliminating all credit card fraud in this day and age is probably not possible. However, with the right technology, it can be minimized to a manageable level.

By Alisha Webb. Alisha is a British writer working out of Barcelona, she also writes for Saffrey.com – London accountants.

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