- Credit Card Fraud Prevention-

Credit card fraud happens whenever someone obtains your credit card account number and uses it to make unauthorized purchases. It can be an dishonest restaurant clerk making an extra imprint of your card, a thief who picks up a receipt you discard, someone pretending to be a telemarketer taking your order, the list goes on endless. So it is absolutely critical to protect yourself and your identity.

If you are a customer, the consumer laws are usually on your side to protect you, if you report the discrepancy and file the credit card fraud dispute with your credit card company on a timely manner. However if you are a merchant, the penalty could be severe, because not only the chance of you winning a fraud dispute is slim, but also the merchandise is lost forever. Again, the law for the most part sympathizes the card victims. Therefore, protecting your own business interest is critical.

Let us begin with taking order process. How do you know if a credit card being given is legitimate?

Using our company as an example, the absolute very first thing we do is to make sure the ship to address matches with the bill to address. Unless photo copy of a driver's license is provided. No exception. If this policy causes any inconvenience, try alternative payment methods that can accommodate, and at the same time, will minimize the chance of fraud.

If you have a online merchant payment service, you can adjust the setting to enforce the ship to and bill to match in order to approve transactions. This method is an excellent way to discourage the thieves, although it is still not 100% safe. But if a transaction amount is fairly small, this step should be sufficient.

When a transaction is large (your own judgment), you may need to take it to the next level: verify with the issuing bank. You can find out which issuing bank by asking the customer directly, or ask your merchant credit card service provider. With the first 6 digits of the credit card, your merchant credit card service provider can identify which issuing bank it is. Once you know who the issuing bank is and their contact toll free number, you can dial in and verify the address and even the phone number on the card.

If, based on your discretion, there is still doubt, go ahead and politely offer your customer alternative payment methods such as wire transfer, check (be sure NOT to release the merchandise until its cleared), or others.