How Merchant Credit Card Account Users Should Identify Fraud Signs

Merchant credit card account users that process payments in a card-absent environment should develop in-house policies and processes for managing atypical or suspicious transactions and offer sufficient training for their sales staff. Being capable of identifying dubious orders are even more important for card acceptors involved in e-commerce and mail order and telephone order (MO / TO) sales, and personnel should be provided with specific instructions on the actions they need to take to verify these orders.

Everyone of the sales staff of a merchant credit card account user needs to be on high alert for any of the indicators of suspicious customer behavior that are listed below:

• Rush transactions: Urgent request for a fast or overnight delivery - the type of customer who "wants it yesterday" - have to be red flagged for possible fraud. While often completely legitimate, such orders are one of the most often seen signs of "hit and run" - kind of fraud schemes that are targeted at obtaining merchandise for quick resale, or "flipping" it.
• Random transactions: Watch out also for customers who do not appear to care much if a particular item is out of stock - "You don't have it in green? What other colors do you have?" - or who buy randomly - "I'll take one of everything!" Again, orders of this kind may be intended for a subsequent resale, instead of for personal use.
• High-risk delivery address: Evaluate and red flag any transaction with a shipping address that is not identical with the billing address on the consumer's credit card account:
  • Demands to deliver merchandise to P.O. boxes or an office address are quite often linked to fraud.
  • Maintain a list of ZIP codes where high rates of fraud are prevalent and verify any transaction that has a shipping address in these areas.
• Hesitation: Watch out for consumers who hesitate or are not certain when giving you their personal card information, such as a ZIP code or the spelling of their own family or street name. This is again quite often an indicator that the customer is using a false identity.

In examining what looks like an atypical order, merchant credit card account users that accept credit cards over the phone or online should bear in mind that, as always, if a sale sounds too good to be true, it almost surely is.

There are plenty of solutions that use customizable filters and systems that enable small retailers to better identify and prevent suspicious transactions and you should take advantage of them.

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