Preventing On line Fraud

Running an On Line store like any other business requires attention to fraud. The following article aims to provide the on line store owner with information to allow them to produce policies and procedures which will reduce the likelihood of fraud and ensure profitability is maximised.

With ecommerce, merchants who trade on line need to aware of potential for fraud. Being on line and not actually seeing or dealing directly with the customers means there are new opportunities for those not so honest people to try and defraud merchants.

However armed with awareness and knowledge it is easy to protect yourself by putting in place processes and policies which will prevent you becoming a victim.

Note the following information is focussed on New Zealand clients but can with minor adjustment be applied to merchants worldwide.

Preventing on line fraudCredit card fraud.

This is the most common form of fraud likely to be encountered by a merchant. Since you are not seeing the customer face to face, is can be harder to identify if the customer is valid. Note that although credit card holders usually have limited liability, a merchant will shoulder the cost of a fraudulent transaction and any related fees.

There are other types of fraud for example:

However most of these can be avoided easily by following two simple rules:

  1. You don't have to deal with every contact made, if it is suspicious or too good to be true. Ignore it or go to additional lengths to find out more about the contact before acting. Resort to telephone contact or meetings to find out more.
  2. Make sure "payment" is cleared or verified before shipping goods.

Signs of Credit card Fraud.

For merchants to protect themselves from credit card fraud. They need to be on the look out for common signs of fraud as follows:

Look for orders which are:

Look for customers which fall into the following areas:

Look for credit card numbers:

Note none of the above are signals that fraud is occurring, but the merchant should have procedures in place which mean orders which meet these circumstances are likely to be checked out in more detail.

Preventative measures.




Credit Cards:

Countries to watch.

The following are potential high risk locations for on line fraud. This should not prevent merchants trading with these locations, just take additional care.

  • Africa
  • Amsterdam
  • Belgium
  • Bulgaria
  • China
  • Eastern Europe
  • Egypt
  • Ghana
  • Indonesia
  • Israel
  • Lithuania
  • Malaysia
  • Russia
  • Malmo in Sweden
  • Nigeria
  • Pakistan
  • Palestine
  • Romania
  • Southwest Asia
  • Turkey
  • Ukraine
  • Yugoslavia

Credit Card processing.

Although on line transactions can be processed manually, 4success strongly recommends merchants consider this only as a last resort. It is much safer and efficient to have credit card payments validated and processed in real time. This helps avoid potential problems with credit card details being stored or transmitted, as these can be hacked or intercepted.

When accepting credit card transactions 4success recommends:

If you require a web site which accepts on line transactions - contact 4success now.