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Credit card fraud screening tip

Posted by Michael Bloch in ecommerce (Tuesday November 14, 2006 )

By the way, if you’re new to ecommerce, it’s wise to note that chargebacks not only cost you through loss of goods, services, chargeback fees and associated paperwork in the short term, but too many chargebacks can see you winding up with higher transaction fees or even the termination of your merchant account. Once your merchant account has been terminated for reason of excessive chargebacks, you’ll find it difficult to obtain an account elsewhere without paying through the nose.

An ounce of prevention is definitely worth more than a pound of cure when it comes to fraud screening and this tip is only one strategy. Screening should really be approached holistically.

Pick up some more fraud screening tips

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Active fraud screening is a necessary, ongoing and frustrating part of any online business in order to prevent, or at the very least, minimize credit card chargebacks.

Here’s a quick tip to help cut down the amount of time you spend on fraud screening if you do much of it manually or if you only rely on Address Verification System (AVS). AVS on its own isn’t enough, and neither is CVV2.

After you’ve been screening for fraud for a while, you get a feel for shonky credit card transactions, but at times some will be borderline. A credit card transaction might pass your various screening methods, even the IP address isn’t enough to raise a red flag; so there’s really not evidence to void the transaction with impunity – but the transaction still doesn’t feel quite right.

You can call the number on the receipt, but if you’re short on time or there’s no answer, try using a free online reverse lookup service. It’s simply a service that allows you to enter telephone numbers and retrieve details such as location and at times, the name and street address of the subscriber. This can be more effective and quicker than using a traditional phone directory search.

The reason I suggest a special focus on phone numbers is that I’ve noticed many fraudsters will get all other details correct on an order, *except* for the phone number.

If your gut vibe says something’s up and the reverse lookup also shows different location details, then it’s time to engage your next level credit card verification strategy or to simply void the transaction.

Here’s a couple of services where you can run reverse lookups for free:

For USA numbers:

http://www.whitepages.com/10001/reverse_phone
http://www.411.info/

For Canada numbers:

http://www.411.ca/

I wasn’t able to easily find a reverse lookup service for UK numbers, so if you know of one, I’d appreciate if you would please post it in this thread.

For an Australian reverse lookup service, it appears our national telco likes to sue anyone who offers such a free service for breach of copyright and there might also be some implications relating to the Australian Privacy Act. There are some services out there, but you’ll need to really hunt around. Given that I’m not familiar with the laws regarding this issue, I’m hesitant to post any links.

By the way, if you’re new to ecommerce, it’s wise to note that chargebacks not only cost you through loss of goods, services, chargeback fees and associated paperwork in the short term, but too many chargebacks can see you winding up with higher transaction fees or even the termination of your merchant account. Once your merchant account has been terminated for reason of excessive chargebacks, you’ll find it difficult to obtain an account elsewhere without paying through the nose.

An ounce of prevention is definitely worth more than a pound of cure when it comes to fraud screening and this tip is only one strategy. Screening should really be approached holistically.

Pick up some more fraud screening tips



 

 
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