No fraud screening? Can you say “Swiss cheese”?

Many online payment services can process your payments real time. This means that your customer is still on your site as if he were in a normal brick and mortar store. This is especially great if you have a business that sells software or if you are an online gaming site. If you are selling items that are physically shipped to an address then it is of less importance since the processing time of the payment is negated by the shipping time anyway.

Unfortunately real-time order processing als requires pre screening of orders and this is something that not all processors do. That means that if the credit card is verified, the order is processed and the “customer” immediately gets his subscription for example. You, will only find out the transaction was fraudulent once you get notified of the chargeback. At this point the service is already rendered. The AVS service does a check on the address to match against their file on record. But with online and virtual products the fraudster won’t care if the address is correct. The item won’t be shipped anyway. Therefore you have to make sure to use good fraud screening services. They will help you decide whether or not you want to accept an order. They are designed and customized to ensure that fraudulent transactions are filtered and good transactions are still processed normally.  

How do I prevent fraudulent online credit card transactions?

When you do business online you always need to take extra precaution against fraudulent transactions. Online fraudsters are anonymous and they try to circumvent various types of regular fraud prevention. Does that mean you are better off not accepting credit cards online? No, but you should be more careful deciding which ones you want to accept and which not.

Olympics 2012 could set records for cyber crime

London will be the epicenter for the 2012 Olympic Games as the construction of the venues is fully underway, not to mention the planning for the infrastructure. Question, are you prepared as well?

“How so”, you may ask. What do the Olympic Games have to do with me? Let’s go back to 2008: the Olympics in Beijing. The amount of cyber attacks during those 16 days ran in the hundreds of millions. Since 2008 the amount of internet users has grown rapidly as well. In June of 2010 an estimated 1.9 billion users which is almost a 25% increase. It’s only a matter of reasoning to see that the amount of attacks will increase as well.

5 ways your business can reduce online credit card fraud

Any online business will endeavour to greatly reduce their exposure to online credit card fraud. The most important way to do this is by implementing protective measures which can lead up to an 85% reduction in online fraud. Can you reduce all credit card fraud? Well, only if you stop accepting credit card payments, which is most likely not your goal.  

Virtual currency fraud spills into real world

One of the biggest commodities in online fraud is virtual currency. It is used to purchase virtual goods in many online communities such as social networking websites, virtual worlds, and online gaming sites. To some it might be difficult to believe, but these virtual currencies and goods have real value.

Virtual currency also includes the benefits of loyalty reward programs you can find in the retail and travel industry where customers get rewarded points. There is a giant market for selling these points. Gizmodo has reports that Microsoft points (used to purchase digital goods and gift cards for the Xbox) have already been a target of hackers. The idea behind the attack was to automatically generate Microsoft points that could be used for gift cards, Xbox items, purchase of games and other items.

Sony’s Playstation Network nightmare

It was a matter of time of course, but either Xbox Live or Playstation Network were bound to be hit once by hackers. It just shows that internet fraud is here to stay and it can hit every company. The nightmare for Sony is extremely big and will cost the company billions of Dollars. The stock markets already weigh in on the PSN outage. Today, Sony shares fell 4.5 percent to 2,260 ($27.71) on the Tokyo Stock Exchange.

The company is doing everything it can to salvage its reputation and keep its customers. So far, no credit card companies have seen any related activity to the breach yet, but that of course is no guarantee that nothing has been obtained.

Botnets are the root of evil

Botnets are infecting the world. Is it really that bad? According to Ellen Messmer of Network World America’s 10 most wanted botnets are responsible for an estimated 12.4 million infections in the United States.

Addressing botnets is getting increasingly difficult. According to Messmer there are three primary threats:

Fraud prevention: customize your fraud prevention

Last March was fraud prevention month. Often fraud prevention information is aimed at consumers, but businesses are hit even hard or even harder. Every consumer that is the victim of identity theft can lead to a possible fraudulent transaction by one your “customers”. The percentage of online fraud increases each year and becomes a bigger and bigger topic for online businesses.

Does this mean you should close your business right away?

Ways to improve your fraud prevention

Getting your business started or rethinking your business always requires planning. If you are serious about getting the most out of your business here is a good way to start building your business. Rule number 3 is of prime importance when it comes to fraud prevention.

Rule #3: Build a network to magnify your company.
People tend to think that behind every great start-up is a single entrepreneur with a whiz-bang idea. The reality is great companies are built by a number of people with talent who are surrounded by amplifying networks. The most successful entrepreneurs bring in advisors, investors, collaborators and early customer relationships

As stated above, make sure you get the right people who know your business, your customers and the trends in your market. Getting to know your market intimately will help you with recognizing fraud. This will ultimately help you reduce fraud as much as possible.

How do you get to know the market? Research your customers, get to know who they are, what they spend, how often they spend it, which countries most of your customers come from, etc.

Build a network with professionals in the online fraud prevention world to get an unbiased in-depth analysis of your business model and your web site. Also make sure your payment service provider goes the extra mile for you. They are experts in processing payments, so they should also be helping you improve your business.

Is every chargeback a sign of fraud?

Over the years I have had several merchants ask me why every chargeback is not considered fraud. They believed because the product was shipped, but the chargeback was made regardless, thus it had to be fraud.

Is every chargeback the result of a fraudulent transaction?