Has
found this article for all our wholesale buyers of clothing,we know this will
be of help to both ladieswear retail buyers and Internet traders.
Avoiding
fraudulent transactions - A must read for all online sellers
In
this article:
The
role that fraudulently acquired credit card numbers have to play Online
spoofing its definition and the prevention of it The role that address
verification systems have to contribute to the prevention of online fraud for
sellers Implement robust preventative measures against recognised red flags
What are some practical steps to prevent online fraud from occurring
One
of the most immediately alarming and sinister aspects of criminals is their
uncanny ability, like any other parasite in existence, to adapt to changes in
its host’s environment; in the interests of ensuring its own survival. Whilst
the internet has revolutionised the manner in which business entities are able
to provide their goods and services, it has also provided ample opportunity for
a myriad of different illegal activity.
A
common misconception concerning online fraudulent transactions is that they
affect and victimise only a single group of internet users. In reality,
fraudulent transactions on the internet can affect both purchasers and sellers
alike, meaning that we must all be on our guard. However, the purpose of this
article is to consider the risks that are specific to online sellers, irrespective
of what capacity they maybe acting in (whether in the pursuit of a business, or
as an amateur hobby).
The
role that fraudulently acquired credit card numbers has to play
One
of the most essential tools relied upon and required by an online fraudster
when they seek to target an online merchant is the acquisition of fraudulently
acquired credit card numbers and other sensitive financial information. The
reason that this information is so crucial to the fraudster is as follows:
It
allows them to more readily evade detection and capture, by allowing them to
conceal their tracks and reduce the degree of personally identifiable
information It also enables them to conclude multiple transactions within a
short space of time, thereby allowing them to acquire high value items before
they ultimately detected Online spoofing, its definition and the prevention of
it
A
common method in which credit card details will be fraudulently acquired is by
means of “online spoofing”; whereby the fraudster will gain unauthorized entry
to the database controlled and operated by the online merchant and then use the
values stored within the database. The unsuspecting online seller will then be
led to believe that a former customer is now making additional purchases, and
so will not be liable to investigate further.
With
that in mind then, it is crucial that the database you operate which contains
the credit card details of customers, both current and former, is kept
password-protected, outwith the main root directory of the server, and if
possible, encrypted as well.
The
role that address verification systems have to contribute to the prevention of
online fraud for sellers
One
of the most directly effective methods of reducing the risk of a fraudulent
transaction from taking place is to make use of a credit card processing
gateway; specialised software which makes use of advanced algorithms to verify
and validate the personal details submitted by any customer in the interest of
fraud prevention.
Specifically,
credit card processing gateways will feature and rely upon what is known as
“address verification systems” and these will check to see if there are
discrepancies between the IP address submitted by the customer, in addition to
their geographical information, and the information submitted on their credit
card.
Some
of the more sophisticated of the AVS ‘s will also rely upon the excluded
countries list, i.e. a list of countries across the world which have been
identified by various agencies as being especially problematic for the risk of
certain types of online fraudulent activity.
Another
red flag to be aware of is where the shipping address (also known as the
delivery address, this is the address to which the goods will be delivered to)
differs from the billing address. For obvious reasons, online fraudsters will
seek to conceal their true location and will instead designate a neutral locale
as being their address so that they can then recover possession of the goods
when it is safe.
Implement
robust preventative measures against recognised red flags
Online
merchants should educate themselves as to the typical habits of online
fraudsters which are outlined as follows:
When
a fraudster has access to a clean and safe computer, they will then proceed to
conduct as many bogus transactions as they can from that machine. This means
that if there are several transactions being submitted to your payment portal
which all feature different cards which have the same IP address in common,
then this will require further scrutiny. The actual probability that a genuine
and legitimate customer has more than two cards and then seeks to use those
same multiple cards for different transactions is remote indeed.
In
the interests of avoiding detection, fraudsters will be eager to ensure that
the transactions that they submit are processed as relatively quickly as
possible and so to that effect, will be more than prepared to pay a significant
premium to hasten the delivery process.
There
is an increasing trend for fraudsters to rely upon and make use of account
generating software to provide them with fictitious account details and numbers
which are valid on paper, but bogus in reality. The Achilles heel of these
programs however, is that they will generate account numbers etc. in a
sequential manner, which is another cause for additional investigation.
The
actual duration of time that a fraudster will remain a customer and within the
sphere of awareness of the business operator is very short; this is due to the
motivation on the part of the fraudster to ensure that they achieve their
intended goal and then disappear. Therefore, fraudsters are most likely to be
an entirely new customer who has not contracted with the company previously.
What
are some practical steps to prevent online fraud from occurring?
Provide
specialised training to your staff to ensure that they are better educated as
to the warning signs of fraudulent activity, whether actual or merely
potential.
Limit
the exposure of your business to lower risk demographs such as dealing only
within the Business to Business sphere and dealing within a domestic market as
opposed to overseas customers.
Maintain
a log of all suspicious transactions, in addition to the salient details of the
people responsible for said transactions.
By
carefully combining preventative measures with proactive steps to combat the
fraudulent activities that take place, you too can ensure your business is safe
from the ravages of online fraud.
Thanks
for your time,
Team
Eles
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