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5 Steps To Protect Your Business Against Credit Card Fraud

credit card fraud protectionThe media, consumer groups, banks and even colleagues offer a wealth of tips and information about how credit card holders can protect themselves against credit card fraud. But what about the businesses that are subject to thousands and some hundreds of thousands a year in credit card fraud and chargebacks. Fraudsters who place orders over the phone, or online with fake or stolen cards, are soon after discarded.

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In many instances, the business tends to ship the goods prior to any information being presented to them that it was in fact a stolen card and that they have just been a victim of credit card fraud. Once this information is presented, that business is stuck with the bill, as the true owner of the credit card is not liable for the price of the good that was purchased.

Any business that has been affected by credit card fraud can attest to the fact that this is no small issue, and charges can add up annually to much more than a few thousands dollars directly out of your bottom line. Also, which is one of the most frustrating parts regarding credit card fraud is, do not expect to get much help from the credit card companies, because it might not happen, especially if it is a smaller amount that was charged.

The best way to protect your business against credit card fraud is to consider these 5 easy steps.

1. Get all the information related to the card

If the credit card transaction is being done over the phone - ensure that the caller reads out the entire name on the credit card in addition to the 16 account digits, card verification number and the expiration date. Also, you must ask for the full address and phone number of the card holder.

The reason you must obtain all of this information is so that you can protect yourself in case the caller simply has the credit card number, but not the actual card. If they cannot present the verification code, or the expiry date that corresponds with that card, they are clearly no the cardholder, and you will be able to deny purchase as well as report the card number as stolen.

2. Different bill to addresses

Be cautious of callers or customers purchasing goods from your website that use different 'bill to' and 'ship to' addresses. If, for whatever reason, the caller requests different address for billing and shipping, ask for phone numbers for each address and a contact name in case you need to call.

Once you have collected that information, you can use a website such as which integrates telephone numbers, maps and email address in order to check for bogus billing addresses.

3. Next=day orders

Watch out for orders that are unusually large orders that require next day shipping. Orders such as these ones should raise a red flag. The reason being is that fraudsters need to place their orders, have them approved and the product or good shipped out before the credit card have been reported stolen. Credit card fraud is not always a quick process; it can take some time for the cardholder to realize that their card has even been stolen.

When a fraudster uses a stolen card, they are not concerned with the price of the products or the amount, which means that they typically make large purchases and orders for next day delivery and shipping. 

4. Confirm credit card before shipping

Do everything possible to validate the credit card prior to shipping your goods. This means, using all the information that is presented to you, making sure the billing addresses match up, names match up and the card has not been stolen or cancelled. You can also call the number that was given to you and make sure that it was not a made up number, or the number of someone else not associated with the card.

Credit card fraud happens instantly, but you can take the time to make sure that your products and goods are not going to a fraudster.

5. Take Action

If you do come across a credit card that has been stolen, or the information that was presented to you does not add up, do not hesitate; take action by calling the police and notifying the respective credit card company that the card belongs to. The faster you act, the more likely you will be able to prevent another fraudulent transaction was going through. You will be doing a great service to the actual card holder, as well as your business.

Always follow your instincts. If the caller seems rushed on the phone, is unable to provide the requested information, and may stumble regarding phone numbers or addresses, you have the right to hang up, ask the person to leave your store, or deny the transaction. Take the time to go over all the details and help save your business from being a victim of credit card fraud in the future.


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Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.

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