The GDC Blog
Detecting fraudulent transactions can be tricky. Fraudsters are always looking to profit from unsuspecting merchants. These tips can help merchants avoid falling victim to credit card fraud.
1. Use an Address Verification System (AVS) to verify a cardholder’s identity
An address verification system verifies the identity of a cardholder with the name, address and other personal information on file with the issuing bank. While, an AVS match does not guarantee a purchase is legitimate, a non-match is a signal that a transaction needs further investigation.
2. Verify the IP address of a customer
When making online purchases the IP address of a customer will generally be located near the customers address. If an IP address shows a purchase being made from different country than the card holder’s address the legitimacy of the transaction may be questionable.
Using multiple identities to make purchases from the same IP address can also be a sign of fraud.
3. Be wary of anonymous email addresses
A high proportion of fraudulent orders come from email address hosted by free services or with anonymous names. Fraudsters will often create fake accounts to accompany stolen credit card information.
4. Ship only to the cardholder’s billing address
By shipping only to a cardholder’s billing address, merchants garner increased protection from fraud. Requesting a signature provides proof the merchandise was delivered and prevents the same individual from placing multiple fraudulent orders.
5. Analyze transaction data
Transactions charged to sequential account numbers, multiple transactions to one card in a very short period or multiple rush orders to the same address may indicate attempted fraud. Orders that are larger than normal for your business or orders with multiple quantities of a single item may be cause for concern. Thieves know that they must make transactions quickly before their victims realize their personal information has been stolen.