Prevent Online Credit Card Fraud

The Internet has become an ideal place for hackers, scammers and criminals to use as their very own illegal playground with little fear of ever being found. Online merchants need to minimize the risk of online credit card fraud by installing security tools and procedures that can effectively reduce up to 50% of fraud, a bonus for your customers and business. Fraudsters will most commonly conduct their criminal activities by setting up a web-based free email address, such as hotmail.com, yahoo.com, gmail.com and many others. Web-based email is mainly logged on via a web browser and not an email client, such as Microsoft Outlook or Mozilla's Thunderbird. Web based emails can be set up by anyone and so are a popular choice for criminals who use them to remain anonymous as details are not easy to trace back to the owner. Credit card fraud is helped in its escalation by underground software programmes used to generate thousands of usable, but false credit card numbers and various newsgroups set up on the Internet where stolen credit card data is posted.

As awareness of credit card fraud grows merchants are learning to undertake as many precautionary means possible to protect themselves against online crime. The obvious method would be to not accept credit cards on the website, but that would lead to losing international sales, impulse buyers, unable to compete with other online merchants and the vast majority of customers buying elsewhere.

There are a few methods you can use to minimize the risk of online fraudulent transactions. First and foremost is to make certain all customer details are completed and don’t accept the sale until this is filled in correctly. If your website experiences many cases of fraudulent transactions, consider not accepting any orders from a free web based email address. This might seem a little dramatic but if your losses are multiple with charge back penalties and transaction fees on top, it could be the only solution. Ask the customer if they have an Internet service provider (ISP) or domain based address as these types of email accounts are much easier to track. Most fraudulent orders should only come through the free, web-based, or e-mail forwarding services. If you are wary of turning away business from customers with web based emails, consider the risks involved before making any final decision. If people have a free e-mail service they will usually also have an ISP email address also, supplied when the account was opened. Just let the customer know that orders through free e-mail services aren’t accepted and ask them to use their standard ISP issued address.

A simple way to confirm a transaction is to call the telephone number given on the order form. This will either confirm the order or bring the card holders attention to the fact that their card is being used for fraudulent transactions. Then notify the card issuing banks fraud department that the card is being used illegally.

Regrettably, fraudsters are always developing new systems and methods to avoid detection and stay one step ahead of the merchants, banks and FBI. As one fraud method is identified and thwarted, a new one springs up to replace it. Criminals are generally of different types, people who just try one time and are easily stopped with straightforward safety measures, petty criminals who can be prevented with high-quality anti-fraud tools, and professionals. The professionals are the ones that will make this a full time career and be clever enough to keep one step ahead of the law. Fortunately, there are not too many of these. Fraud committed against merchants will continue to grow so defend your website with a specialized system of anti-fraud tools.