Merchant Account Risk, Credit Card Fraud Protection & Prevention

Minimize risks involved with a Merchant Account

In an increasingly Internet-intensive age, credit card fraud protection has become an essential security measure for businesses to take. As long as you have something of value, there will be thieves who want to take it from you.

Contrary to popular belief, merchants are far more at risk from credit card fraud than the cardholders. Have you ever been a victim of credit card fraud? If so, you know just how traumatic it can be. Credit and charge card fraud is a huge industry costing consumers and card issuers hundreds of millions of dollars each year. Whether you have a brick-and-mortar store or an online business, credit card fraud is costing you money. So what can your business do to prevent credit card fraud?

Steps to Prevent Credit Card Frauds
The most common thought of credit card fraud is when your wallet or purse is stolen, and the thief uses your credit cards to make unauthorized purchases. However, to combat credit card frauds effectively, it is important to first understand the mechanisms of executing a fraud. You may not be able to keep hackers or dishonest employees out of your credit card processors' office, but you can keep thieves from filching your credit card information from the garbage.

Adopting few simple procedures, will help you reduce your exposure to fraud and protect your sales.

False Identification: Contributing to losses from bad checks and credit cards is the use of false identification.

Ask for and check identification, such as a driver’s license or other photo ID.
Check the Hologram and Visa and MasterCard logo to see if they look blurred.
Check to see if the ID has been altered in any way as a person trying to use a stolen credit card may also have stolen or fake ID. If you suspect a card to be counterfeit, call your automated authorization center to report the card. If they do not produce any satisfactory identification, do not complete the sale.

Address Verification System -- Learn to recognize it before it is too late!!!
This technique is applicable in card-not-present scenarios. Address Verification System (AVS) is a process that matches the first few digits of the street address and the ZIP code information given for delivering/billing the purchase to the corresponding information on record with the card issuers. Most credit cards have the BIN or “first four digits of the account number” printed or embossed. If they do not match or are missing, the card is counterfeit.

Be Cautious -- Common sense may prevent credit card fraud
The risk of fraud is never the same for every single transaction. Credit card fraudsters employ a large number of modus operandi to commit fraud. Indeed, there are many factors associated with a particular type of transaction. But, with the increasing rate of online buying, credit card fraud—known as misappropriation—is spreading like wildfire. What is more, if you do not detect it early enough, it could leave bad marks on your credit report that could haunt you for years to come.

Credit card fraud may not be entirely preventable, but by establishing cautionary procedures to check every credit card transaction, you can cut down your credit card fraud losses.

By familiarizing yourself with the information on this page, you will not only be able to keep your information safe but run your business hassle free.