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How To Prevent Fraudulent Credit Card
Transactions
What Are Possible Signs of Fraudulent Transactions see at Web Hosting
Companies?
·
Customer wants to pre-pay for a year
·
Domain Name Registration for 5 years or
more
·
Orders using free email address providers
like Hotmail, Yahoo, etc.
·
Usage of multiple cards to complete order.
·
International address. AVS can not
validate those international addresses.
·
Multiple purchases in a short time period.
·
The customer and billing addresses are
different.
AMEX, VISA, and MasterCard implemented a security feature known as
CVV2 and CVC2. These are the three-digit or four-digit numbers
printed on the back side or front side (depending on card company) of
the card (signature panel) to the far right. The three/four-digit code
helps to validate that the cardholder has the card in his possession.
You can include the code in your transaction processing and need to
receive a match to successfully complete the transaction. If you are
using a shopping cart for your hosting sign-up process, make sure that
it is capable of collecting and processing these numbers. IMPORTANT: The
ToS of the credit companies state that you are not allowed to store
these numbers.
Use
Address Verification Service (AVS) on all US transactions to verify the
billing information provided in the order with what is on file with the
card issuing bank. As a bare minimum, the zip code should successfully
match before the transaction is approved and you hand out the account
information. You should retain the response information for some time in
case of a chargeback.
The
possible AVS messages are:
Y
Exact match on street address and 5 or 9 digit zip code.
A
Address matches, zip code does not
Z
zip code matches, address does not
N
No match.
U
Address information is unavailable or Issuer does not support AVS. These
transactions are only applicable for Visa and the merchant isn't
responsible for chargeback liability.
R
Issuer authorization system is unavailable, retry later
E
Error in address data unable to complete check.
G
non-US Issuer not participating in AVS - Visa only. The error messages
will vary from one provider to the next. Contact your provider for more
information.
S
Address information is unavailable or Issuer does not support AVS -
MasterCard only.
The
most important warning sign of fraudulent transaction are international
orders. It is very sad to be so generic with this statement but the
percentage of having a fraudulent orders goes up immediately if the
order comes from a non-US location. Be aware of cities or countries with
high rates of fraudulent transactions. Malaysia, Indonesia, and most
countries of the former Soviet Union tend to be source of many
fraudulent orders.
The
most effective way to help eliminate fraud or chargeback's is to simply
call the customer. A confirmation over the phone is most definitely
advised for any large transactions. If you process a fraudulent
transaction, not only do you lose the funds, but the product/service as
well. A phone - even if it is international will save you a lot of
hassle in the long run.
What if you find a transaction to be suspicious? Contact your
authorization center and let them know you are concerned about the
transaction. They will look at the transaction and may give you advice.
You should also call the customer to request additional information
(copy of drivers license or Passport as an example). Check the IP
address of the sign-up and see where it is globally. Does it matches the
customers address at least by country? Send a confirmation email to the
customer verifying their order.
It
may be a good policy to only accept orders with identical Customer and
billing addresses.
Maybe you want to scrutinize international orders as your protection
against these consumers is very minimal and not accepting them could be
a wise choice for your web hosting business.
Placing fraudulent notices, buttons and images on your web site and
order forms will help discourage any person trying to place a fraudulent
order. Make sure that the customer will se upfront that you are recoding
the IP address and that you will notify the law enforcement agencies if
needed. It might not protect you in every case but eventually it will
help to cut down the number of fraudulent orders.
This article is the property of
www.bestcreditcardsonline.com,
which has been offering credit cards services since 2002.
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