How to Prevent Card Fraud

By James Mellor posted 03-21-2021 22:11


One of the biggest threats to businesses everywhere is card fraud consisting of both debit and credit cards. Luckily, this type of fraud is preventable as long as you take the right approach to do so using the right technology, tools, and awareness.

One of the integral keys to preventing this type of fraud requires a thorough comprehension of how this fraud occurs and conducting an audit of your business systems to learn how to patch up your areas of vulnerability. By identifying this key information, you will be able to better detect and prevent this type of fraud in your business.

Different Card Fraud Schemes

There are a lot of criminals who are savvy enough to develop more advanced methods of committing this type of fraud. Still, a lot of these criminals do depend on businesses not having a good understanding of how this fraud is committed in the first place. That way, they can do so by being undetected. Transaction fraud detection will put you one step ahead. To give yourself the best chance of not becoming a victim, you should be aware of these common fraud schemes:

1. Stolen Card Details

A lot of criminals will steal and sell stolen credit cards on the Dark Web. They will then use the stolen details to make fraudulent purchases.

2. Card Testing

This is generally how criminals go about testing whether or not the stolen credit card information is valid. They will look to validate the card details by making smaller transactions. Once they have validated that the details are correct, they will look to move on to much larger purchases using the card.

3. Diverted Delivery

A lot of criminals will look to order something online and have the package sent to an address that isn't connected to the actual credit card being used. This works because the address verification service that is being used doesn't audit the entire address which makes the mismatch capable of being undetected.

4. Online Skimming

A lot of criminals may look to exploit different security vulnerabilities and flaws in different online payment systems. From there, they will hack the data they need. Typically, fraudsters will be able to extract a lot of personal information including different customer details like order history, passwords, addresses, and more.

5. Fraudulent Gift Cards

A lot of criminals will look to purchase gift cards with stolen cards. They will do this to avoid leaving a paper trail of having things delivered. Also, to re-sell the gift cards on the web without detection.

All of these card fraud schemes that are commonly used by criminals can completely shatter the trust a customer has in your business and the trust you have in your customers. When your business is subjected to one of these schemes, your customers will have a difficult time trusting your business. Likewise, your business will start to look at new customers, large orders, and even changes in the address as potential fraudulent behavior.

Tips For Preventing Card Fraud

This type of fraud is prevalent in business. However, you don't have to be a victim. Now that you have a thorough understanding of how fraud is committed, you will be able to put measures in place that can help you prevent yourself and your customers from becoming victims of fraud.

To do so, you will need to know your customers, how you are making sales, and where your customers are located. All of this information can help you mitigate the potential of becoming a victim of fraud. By using this type of multi-authentication approach, you should be able to leverage the technology available to maximize your protection. You can contact us right now to learn how you can integrate these preventative solutions into your business.

1. Geolocation

By knowing your customer's location, you will be able to verify they are using it at their home address.

2. Biometric Analysis

You will be able to compare the fingerprint to that of the person that owns the credit card.

3. CVV

Having the security code as required can ensure the cardholder physically has the card with them.

4. IP Intelligence

An analysis will be conducted on the IP to figure out potential risks associated with selling and shipping to the address listed.

5. Device Intelligence

Integration of deep packet inspection and proxy piercing can help to ensure that the cardholder is the one making the transaction.

6. Domain Secure

This is an authentication protocol that can be used to ensure the cardholder is the one making the purchase.

7. Merchant Co-Op

This is where you will have millions of different new orders compared with millions of other orders that have been placed with other businesses.

8. SSL

This is essential for any E-commerce business as it ensures that the customer is connected through a secure and encrypted protocol to avoid man-in-the-middle attacks.

Every business needs to have a proven card prevention solution to maximize the trust between the customer and the company. It can minimize the chances of becoming a victim of card fraud on both ends. Criminals are constantly looking for easy and low hanging fruit targets. Don't be one of them.