Credit Card Fraud - Internet Commerce and Credit Card Fraud

 Despite the fact that there are a host of e-payment options out there, it still is a plain fact that the credit card is the internet’s chief currency.

  Research has shown that although credit card companies reimburse 90 percent of consumers whose cards have been used fraudulently, more than 75% of internet merchants who are credit card fraud victims have to bear the cost themselves.

 Keeping this in mind, it has to be said that in spite of the rapid growth of e-commerce, online payment still remains an area of immaturity and major concern for the internet industry, especially since there is no surefire way eliminating credit card fraud.

 Though a majority of the buyers rightly stay away from online credit card transactions as far as possible, it is the online merchants who have to bear the brunt of this problem.

  Why? Simply because current reimbursement and payment protocols are intended only for face to face transactions where the cardholder and card are physically present and the sale occurs based on the cardholder’s signature and card imprint.

 This way there’s a certain amount of security available to both the merchant and the consumer and trust is less of an issue.

  On the other hand, when it comes to online credit card transactions run through an internet merchant account, the deal is a blind one since neither the cardholder or merchant representative is physically present, which means that the primary responsibility of ensuring a "safe" deal falls on the merchant even if they have acquired authorization from the card issuer.

 For the consumer, the best way to avoid becoming a victim is to use virtual card numbers when shopping online and make sure they buy only from those websites which are secure and encrypt payment information in order to keep it secure from hackers and thieves.

 Again this means that the onus to prevent credit card fraud is on the online vendor. So, if you are an online retailer with an internet merchant account, take a look at the following ten tips to prevent credit card fraud:

• Even if it is a bit of a bother, always insist on the mailing address, postal or zip code and phone number of the buyer and verify them before closing the transaction.

• Always ask for a faxed customer signature as well as a faxed Xerox or photocopy of the credit card.

• Check the provided email address against the name on the credit card and if the name on the card doesn’t match the email then it’s best to ask for further ID confirmation before proceeding.

• Don’t process the order unless you are able to directly contact the buyer by phone.

• Make full use of various address verification services wherever possible.

• Be extra cautious when shipping overseas especially since it can be much harder to pursue claims internationally.

• Reject process orders from free email domains unless you have irrefutable proof of the customer’s identity.

• Check the DNS cable of the remote IP of the buyer and use this information to find out the remote server’s geographic area and check it against the address of the buyer. Very few people connect to the internet using a long distance phone call. Also, verify the mailing address, email and phone number of the server since hackers can easily set up their own servers as well.

• Be extremely wary of buyers asking for higher priced fast delivery or those being otherwise cost insensitive, simply because a thief won’t care about the prices as they won’t have to pay.

• Never ship products to postal box numbers and always ask for a physical shipping address.

 So if you own an internet merchant account and you take care and follow the above steps, you’ll go a long way towards preventing your business from suffering the excessive chargebacks that accompany credit cards fraud.