Business Fraud Prevention Series – Part 2

Protect yourself from Scammers – Part 2 – Credit Card Fraud

Fraudulent Cards

Following along in the fraud prevention series is Part 2 – Credit Card Fraud. If you have been involved in online retail and/or international telesales, this topic is not likely a new one. Nonetheless and especially for those looking to get involved in online retail, this is what we found and how we prevent it each and every day.

Part 2 – Credit Card Fraud: When I say each and every day, it is no exaggeration. At VoIP Supply, our customer-base is global and our store is open 24/7 for those in need of VoIP hardware and IP Camera equipment. There are sections of the globe known for fraudulent activity, but it is not limited to foreign soil. To keep this shorter than average, below are a few techniques used and some of the steps you absolutely must take in order to protect yourself.

Things to look for: Some general techniques used to fool online retailers and telesales organizations.

  1. Late day and particularly Friday afternoon orders that must be delivered the next day or by Express shipment. If someone calls at 4:50 pm on Friday and needs 50 Polycom IP Phones delivered the following day, it raises a flag.
  2. Shipping Address variations: If the shipping address is different than the billing address it should be cause to look further. Though often perfectly fine, if someone with a billing address in Nebraska is shipping to Miami, I’d want to look deeper.
  3. Name Variations: If the name on the card is different than the name being shipped to, this could also be fine but can indicate potential fraud activity.

How to protect yourself: There are some basic rules to follow, all of the time.

  1. Verify with the card issuing bank. This is an absolute must if a red flag is up. Get the phone number from the back of the card and make sure that the bank verifies that the card is not stolen, that the names are authorized and that the shipping address is on file as an alternate address for the credit card. All credit card companies allow you to authorize multiple shipping addresses. If you “customer” tells you otherwise, walk away and protect yourself.
  2. Call the company: If Joe Smith from Acme Corp in Lincoln NE wants to ship to Fred Richards in Miami Florida, google Acme Corp and call their phone number to see if Joe Smith works there and truly does want the goods shipped to Miami. Don’t rely on phone numbers provided by suspected fraudsters.
  3. Look up the shipping address. If you google the address to be shipped to and you find that there is a freight forwarder doing business at that address, follow through with items 1 and 2 above.
  4. Common sense. Run the card through your merchant processor as you would any other card and make sure to get the valid name, address and security code with all of them matching. If the code doesn’t match, the zip code if wrong or the name fails, you may have saved yourself some pain down the road.

It is pretty easy to protect yourself and far less expensive than eating a total loss. There are companies out there that will provide these screening services for you if you don’t have time to do them yourself. Be careful and look out for your business as most other people aren’t going to.