| Consumer worries about credit card fraud have | | | | intervene prior to deciding to accept or deny a |
| resulted in numerous protections being created. A | | | | questionable order and can reduce the instances of |
| consumer whose credit card is wrongly used by | | | | fraudulent transactions. |
| another generally has one hundred percent protection. | | | | Of course, it is very possible for scammers to know |
| If your personal credit card is stolen and used by an | | | | the billing address information. Thus, AVS alone is not |
| unauthorized party, the card issuer is usually able to | | | | an adequate means of protection. Perceptive |
| refund all lost monies and will have your account | | | | merchants also avail themselves to the use of CVV2 |
| corrected within days if not hours. | | | | codes. These codes, usually comprised of a few digits |
| This consumer protection is wonderful. After all, none | | | | on the reverse of a credit card, can be requested |
| of us want to suffer the damages of identity theft or | | | | during a transaction. If the numbers fail to match, fraud |
| credit card fraud. The idea of a thieving stranger | | | | may be present. The use of these codes can reduce |
| creating thousands of dollars of additional debt for us | | | | credit card victimization considerably. However, if a |
| or cleaning out our bank account on lark is a frightening | | | | thief has the card in his or her possession, the CVV2 |
| one. As consumers, we all want and need protection | | | | code will be available for use, even in a case of fraud. |
| from this kind of criminal activity. | | | | The codes provide an extra layer of protection but still |
| The other side of the consumer protection coin | | | | allow a space in which criminals can work. |
| however, is not quite as shiny for those involved with | | | | That space can be filled through a variety of other |
| the other end of the transaction. All deals involve two | | | | defenses. For instance, merchants can opt to ship |
| parties: a buyer and a seller. Unfortunately, it seems, | | | | goods only to the billing address associated with the |
| every gain made by one party produces a loss for the | | | | credit card. This prevents thieves from having an |
| other. It appears to be a zero-sum game, and | | | | opportunity to secure the items they are purchasing |
| merchants who process credit card orders are | | | | and can reduce instances of fraud dramatically. |
| learning that the consumer protections they love when | | | | Merchants can also require a copy of identification and |
| a bank card is misplaced can be a horrible burden on | | | | some form of signature before completing a |
| the other side of the proverbial cash register. As | | | | transaction. For online merchants and those doing the |
| consumer safety and care is maximized, merchants | | | | bulk of their business via telephone, this can be a time |
| lose out. | | | | consuming and inconvenient process that may result in |
| Consider a fraudulent credit card transaction. A | | | | lost sales. However, it can be an effective way of |
| consumer has her credit card stolen and it is used to | | | | deterring fraud on larger orders of a questionable |
| place an online order for a product. The merchant | | | | nature. |
| processes the card, ships the product and believes the | | | | In some cases, reported instances of credit card fraud |
| matter is complete. Only later does the merchant find | | | | are really nothing of the sort. The cardholders |
| out that the transaction was invalid and a byproduct of | | | | themselves simply decide they are unwilling or unable |
| fraud. What happens to everyone involved? | | | | to pay for the goods they did, indeed, order. They then |
| The consumer loses nothing. After noticing and pointing | | | | seek a refund by claiming fraud. This kind of first-party |
| out the problem, she is refunded for the fraudulent act. | | | | fraud serves as strong justification for all merchants to |
| There may some inconvenience and fright involved | | | | maintain all information and paperwork related to every |
| when one realizes they were victimized, but the card | | | | transaction. |
| issuer will make sure the consumer does not suffer a | | | | Discerning which transactions are most likely to be |
| financial loss from the act of fraud. | | | | fraudulent and approaching them with a higher degree |
| What happens to the credit card company? Well, the | | | | of skepticism is a powerful means by which fraud one |
| issuing bank is certainly not willing to calmly accept a | | | | can avoid fraud. In some ways, the best defense |
| financial loss in every case of credit card fraud. They | | | | against credit card fraud is to know one's business |
| refund the money to the customer, but they plan to | | | | and developing the ability to spot irregularities in orders. |
| get that money back. Do they accomplish this via | | | | This includes looking more closely at oddly sized or |
| some form of fraud insurance or a governmental | | | | timed purchases as well as considering the nation of |
| program designed to protect them from criminal | | | | origin for an order. Many countries are known to be |
| activity? No. Instead, they reclaim the money from the | | | | the home of some of the most prolific scammers and |
| merchant. | | | | fraud networks and orders from these locale demand |
| The merchant receives a retrieval notice during the | | | | careful attention. |
| investigation of the fraud and, if the claim of | | | | Merchants truly must protect themselves, and one of |
| malfeasance holds water, will then be issued a | | | | the best ways of doing is so is to develop an almost |
| chargeback for the amount of the illegal charge. The | | | | instinctive ability to sense problematic transactions. A |
| merchant account provider will take the money once | | | | healthy dose of skepticism, bordering perhaps on |
| received. To make matters worse, the merchant will | | | | paranoia when involved with a very unusual sale, can |
| probably be charged an additional fee for the | | | | probably spare a merchant from credit card fraud as |
| administration of the chargeback. In situations where a | | | | often as any of the other techniques mentioned. |
| merchant has been victimized repeatedly, his ability to | | | | However, the best defense against credit card fraud is |
| maintain a merchant account may be put into | | | | to use all of the defenses. One should not think in |
| jeopardy. Of course, the previously shipped product is | | | | terms of a single foolproof solution. At this point, none |
| usually unrecoverable, too. | | | | exists. Instead, the merchant must try to find layers of |
| The merchant is the last person in line for any fraud | | | | defense against fraud. This includes taking action at all |
| remedy. If the buck stops anywhere, it stops with the | | | | levels of the sales process and closely tracking the |
| person who made the sale. As such, it is essential that | | | | nature and type of sales. |
| merchants take steps to protect themselves from | | | | It seems almost unfair that a merchant must be so |
| credit card fraud. The steps that must be taken are | | | | diligent in defending against fraud when a consumer |
| generally a matter of self-help, too. There is no | | | | needs must only make a simple toll-free call to get |
| organized effort afoot to better protect merchants. | | | | complete resolution of the problem. However, that is |
| Instead, the emphasis is consistently placed upon | | | | the nature of the current credit card transaction |
| protecting consumer interests. | | | | landscape. Effectively navigating the treacherous |
| What can a merchant do to better protect his or her | | | | terrain requires a great deal of attention and concern |
| business from credit card fraud? A few tactics seem | | | | on the merchant's end. |
| to help insulate merchants from the problem. | | | | Some may argue that consumers lose a great deal of |
| We will be considering this problem primarily from the | | | | money every year from credit card fraud. However, |
| perspective of a merchant who does the | | | | their losses are generally temporary. Credit card |
| predominance of his or her business online or via | | | | companies may also announce that fraud damages |
| telephone. Those who transact business in traditional | | | | their business considerably. There is, inarguably, a great |
| environments have opportunities to obtain signatures | | | | deal of expense borne in handling those issues at the |
| and to check identification that are usually not available | | | | level of the card company. However, the real loser in |
| to their more "virtual" counterparts. | | | | the credit card fraud world is the merchant, who is left |
| The first is use of AVS technology. AVS (Address | | | | holding the bag. Merchants are the true and final |
| Verification Service) refers to the technology that | | | | victims of fraud. Thus, they have no choice but to |
| allows merchants to input information regarding the | | | | defend themselves in order to prevent repeated |
| credit card's billing address that can be obtained from | | | | victimization. |
| the buyer. When the card is processed for a sale, the | | | | Over 27 Million dollars were defrauded through credit |
| merchant is informed whether or not the information | | | | cards last month. has been successfully appealing to |
| matches that which is on file with the credit card | | | | help anybody selling online using credit cards or Paypal |
| company. Disparities indicate that possible wrongdoing | | | | not to lose money to thieves. |
| may be afoot. This gives merchants a chance to | | | | |