Precautions for internet traders to prevent fraudulent credit card customers

Its not always the customer the one who faces problems due to these fraud people.Internet merchants also have same problems as the card users do making them suffer heavy losses.Merchants who offer a product or service online have to take the risk of losing the cost of the product sold online, plus the added cost of charge back fees, and they even face the possibility of having their merchant account terminated by the financial institutions serving them. While this cost can ultimately be passed on to the consumer, the development of this environment hurts business as a whole, and particularly hurts the small business owner.So here by I'm giving you some measures which might come handy in preventing the fraud customers.

Tracing the location of IP adress :
Ip adress which is unique for all the users can be used to find the location of a particular customer in real time as soon as the order is placed thus by alerting you when order comes from location where the probability of fraud is high.
As a result, Geolocation technology delivers data that helps merchants determine which transactions to review and which to allow. This creates a beneficial balance between the risk of fraud losses and that of blocking legitimate customers. Legitimate customers will actually welcome legitimate authentication measures, which will protect them from credit card fraud also and keep the costs of doing business on the Internet down, especially if the customer is properly informed and advised by the merchant of these protection measures.

IP address comparison :
Compare the adress from where the bill is going to be paid with the place where it is going to get delivered as there is no chance that fraud person can recieve the delivery at the bill paying adress.
Although this situation could be legitimate, but it's probably worth a phone call to the customer's phone number or other measures to confirm the order and the identity of the credit card user.

Identify Top risky locations :
Pay more attention if the card or the shipping address is in an area prone to credit card fraud. According to a clear commerce® survey, the top 12 international sources for online fraud are Ukraine, Indonesia, Yugoslavia, Lithuania, Egypt, Romania, Bulgaria, Turkey, Russia, Pakistan, Malaysia, and Israel. The same survey also showed that the 12 countries with the lowest fraud rates are Austria, New Zealand, Taiwan, Norway, Spain, Japan, Switzerland, South Africa, Hong Kong, the UK, France, and Australia.Although all the people ordering from high risky locations cant be doubted,but it can be used to what extent you should take security measured for preventing fraud.

Check email address :
Check the name of the user ordering from the email adress with the name of the credit card owner.Most of the business people who order have their own domain names.So be careful with anonymous free email service users as you cant trace their IP.Also be alert while delivering to a person with a email address in a newly opened domain.

Anonymous proxy servers :
Anonymous proxy servers allow Internet users to hide their actual IP address. The main purpose using a proxy server is to remain anonymous or to avoid being detected. While well known businesses use this to protect internal networks, fraudsters hide themselves behind anonymous proxy servers. It is not easy to detect anonymous proxy servers because they appear and disappear from time to time.

Check the delivery address :
Fraudsters prefer to stay untraceable but still need to collect physical merchandise. One way is to use a public P.O.Box, a private mailbox, or a drop shipment forwarding address as a temporary point of receiving. Never send merchandise to a public rented mailbox, a P.O. Box (except for those you identify as legitimate major companies by phoning their listed number), or shipping forwarder, because the actual location and identity of the receiver is undetectable.

Check the validity of the phone number and the zip code :
Often, merchant will discover orders with invalid zip codes or a mismatch between the zip code and area code will produce fraud rates that are significantly higher than usual. They may wish to apply more rigorous fraud prevention standards by verifying the validity of zip code and the area code. In addition, if the phone is identified as a V.O.I.P phone, offered by many services these days, a delay in shipment until the payment clears may be in order, especially for non-times sensitive items.

the credit card issuing bank’s country with the billing address country :
Another key point to bear in mind is to check the issuing country and the billing address. Make sure the issuing country and billing address country are the same. This is especially important, because minor banks may not have rigorous identification procedures.

Call the credit card issuing bank to verify the validity of credit card :
If online merchants have any suspicions about an order and need to confirm the details of the order, they can call the issuing bank and ask to confirm the general account details. This is to make sure that the card is not stolen. The issuing bank phone number is based on the first 6 digits of credit card number known as the Bank Identification Number (BIN).

Request more identification if in doubt :
While consumers value their privacy and require quick web site ordering facilities, it is important to gather sufficient customer identity details during the ordering process. The customers’ name, credit card number and expiry date is not enough. Merchants should call them for verification through phone or request a photo ID to be faxed if they have any doubts.


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