Cyber Security: Fighting Credit Card Fraud

Credit card criminals are getting smarter, continuously employing new tricks to obtain unauthorized funds from an account or obtain goods without making payment. According to a recent report released by FICO and the US Chamber of Commerce, the United States has a national risk score 0f 687. But it is not just about the number of credit card fraud cases occurring, but the different types there are.

Though security for in-card purchases has been beefed up in recent times, credit card scammers now target purchases made online, via mail or fax, or over the phone for card-not-present transactions. Chip-based technology makes it difficult to counterfeit a credit card, EMV – the global standard for smart card transactions – does not make it impossible for stolen cards to be used online. In fact, according to Juniper Research, a UK-based digital market research specialist, retailers worldwide could lose up $71 billion to fraudulent card-not-present transactions between 2017 and 2022.

What You Need to Do

Identity theft is frustrating for consumers and can cause a lot of pain, but it is no lost cause. Here’s how you can protect yourself against CNP fraud:

1) Do not input your credit card number in a website that is not secure and reputable. A tiny padlock icon often displays at the top left of the web address, indicating an increased level of security. However, this icon only provides some assurance and not a guarantee of security.

2) Do your homework on the company to ensure their legitimacy.

3) To ensure the seller’s email is active, send a message. But be wary of sellers that make use of free email services where there was no credit card requirement for the account opening.

4) Check out the company’s business rating on other websites.

5) Rather than work with only a telephone number or post office box, obtain a physical address. But do ensure you call the seller to ensure the telephone number is functional.

6) Keep and continuously update a list of all your credit cards and account information as well as the contact information of the card issuer. If you suspect anything or lose your credit card, ensure you contact the card issuer immediately.

Online Merchants Can Fighting Back

Verified By Visa is a perfect tool for merchants looking to reduce credit card fraud. Verified by Visa relies on the Three-Domain Secure (3-D Secure) Protocol, which serves as the mechanism for cardholder authentication at the time of an eCommerce purchase. A fabulous layer of protection every merchant should embrace.

e-Commerce companies now employ different strategies to detect CNP fraud, including address verification. An address verification service is a system designed to prevent credit card fraud by allowing merchants compare the given address of a credit card against the address provided in the card issuer’s system. If the addresses do not match, this could be an indication of a fraudulent activity.

Retailers could also request for a customer’s CVV during online transactions. However, while this is a good check, it cannot prevent online fraud if the scammer is in possession of the physical card.

More sophisticated fraud check options include software designed to monitor the location, IP address and device of the buyer to ensure they match with those of the card’s owner. This is why you may receive a call from your credit card company if you’re making unusually large transactions from an atypical location.

However, this fraud prevention strategy could prevent legitimate purchases. For instance, if a digital nomad makes use of an American credit card for an online transaction from an unusual foreign location, the merchant or credit card company will flag the transaction as fraudulent. This could also be the case if you order for a gift to be delivered at a location other than your original billing address while using a foreign IP address.

In any case, though, if the transaction is blocked by a credit card company, a customer can always call the company to explain that the transaction is legitimate. If it is blocked by the merchant, the consumer will likely receive a confirmation email, but the purchase will never go through.

Mobile Makes it Work Faster

As mobile ecommerce continues to grow, consumer expectations are on the increase. Only some twenty years ago, you could buy a book from Amazon by conducting your online search and setting up electronic payment. But with the emergence of mobile systems, there is need for faster transactions – and this could help merchants step up the fight against credit card fraud.

Managing the risks of credit card fraud in today’s volatile internet space is about managing the technical flaws, skill gaps, and behavioral risks.

About The Author

Mark Sands

Mark Sands, co-founder of High Risk Merchant Account LLC, an authoritative expert in the high risk merchant account space. Mark has decades of experience in the payment industry & enjoys writing on entrepreneurial related topics.