10 Ways for Businesses to Stay Alert for Online Credit Card Fraud

24 May 2023

Unfortunately, fraud is an inevitable part of running a jewellery business and individuals looking to carry out fraud have more opportunities to trick small and large businesses online than in face-to-face scenarios.

Largely due to the “anonymising effect” of the internet, individuals looking to carry out fraud using credit cards to gain jewellery will attempt to make their transactions with jewellers appear authentic. As your staff can’t easily check visually in-store to see if someone is acting suspiciously, they can try to earn your trust and get you to lower your guard. E.g., they’ll message or live chat and create tall tales about graduations, gifts that need to be purchased in a rush for special occasions, or gifts being shipped to relatives living overseas.

1. Train your employees to recognize the signs of fraud. Examine your business and determine your unique set of risks. Ensure your employees understand these risks and how to mitigate them. Provide regular training sessions to help them understand how to spot suspicious activity and how to handle it. Internal strategies and controls like maintaining an internal database of fraudulent transactions and setting goals for reducing fraud as a percentage of sales can promote profitability.
2. Use anti-fraud software to help detect suspicious activity. There are many tools available that can help you monitor your transactions and identify fraudulent ones. Establish your sales order process to address risk concerns. Highlight required transaction fields, verify card and cardholder data, use cookies to recognise customers and identify high-risk international addresses.
3. Protect your merchant account from intrusion. Implement strong password policies for all employees and ensure that they are changed frequently. This will help prevent unauthorized access to your systems and data. Minimise the risk of cyber thieves gaining access to your account or payment gateway and making fraudulent fund deposits with monitoring, passwords, and information security efforts.
4. Verify all credit card transactions and implement fraud screening procedures. Screen online card transactions to minimise fraud for large ticket items and high-risk transactions. Make sure that the name and other identifying information on the card match what is on file and cardholders address (and only dispatch the items only to the address of record).
5. Prepare to handle transactions post-authorisation. Evaluate how you will deal with approved and declined authorisations before fulfilling an order. Require email order confirmations for approved transactions and review declined authorisations to take appropriate actions.
6. Be sure you are dealing with a real person and not a bot, malware, or synthetic identity. Keep an eye out for unusual or suspicious activity. Watch for purchases that are larger than usual, purchases made outside of normal business hours, or purchases from unfamiliar customers. These items of jewellery may appear completely random in terms of size, colour, and type. If a purchase was accepted, they may return to the online store later to buy another batch of items.
7. Be cautious of email or phone scams. Fraudsters will often use email or phone scams to trick businesses into giving away sensitive information or making fraudulent transactions. Hackers regularly will use phishing emails to get into e-commerce environments. The best form of defence for this, is regular training for staff on how to spot these emails. Sometimes a fraudster will make a payment over the phone or online using a stolen card number and then request to collect the goods via a courier service, or friend/relative – because their address doesn’t match the legitimate cardholder’s. They may even buy online and look to pick-up in store, hoping to trick staff by claiming they’ve forgotten the physical card used to purchase and for verifying the persons identify.
8. Make use of fraud prevention tools. Widely used tools include Address Verification Service (AVS), Card Security Verification Codes, Verified by Visa® and MasterCard® SecureCode. Considering implementing 3D Secure authentication on your website as this will not only help to reduce online fraud but it’s a requirement under PSD2 payment rules. Enhance these checks by partnering with a payment provider (PSP) that also runs background checks.
9. Keep your IT systems up to date. By keeping all your IT systems regularly patched (on the latest, most secure version) and secured with anti-malware protection, you stand the best chance of keeping these attacks at bay. Credit Card details are stolen and sold online easily and therefore online attacks and attempts at fraud are a popular method. Regular testing of your e-commerce system will also reveal any new vulnerabilities that may appear.
10. Have a response plan in place. If you do experience fraud, have a plan in place to respond quickly and effectively. This will help minimize the damage and prevent it from happening again in the future.

Source: SecurityWise