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How can I avoid fraudulent transactions on my website?
Posted by Diego Cousinet on 28 February 2011 09:08 AM

The Internet has made it very easy for criminals to conduct their offences with relative anonymity.

If you're a merchant selling goods online, check these items for every order you receive.

Billing versus shipping details

Does the blling address match the shipping address? Does the contact name match the credit card name?

Mass-quantity orders

That order for 100 units may seem exciting, but always confirm by telephone before shipping goods that the order is genuine. If the number doesn't connect, forget about it.

Speed of shipping

A criminal will want the goods as fast as possible, and they won't care what it costs if they're not paying.

Free email addresses

Be suspicious of people using Hotmail, Yahoo, and other free email services. They are much harder to track down should something go wrong.

High-fraud countries

The following countries have been flagged by credit card companies as having a high level of fraudlent credit card activity: Ukraine, Indonesia, Yugoslavia, Lithuania, Egypt, Romania, Bulgaria, Turkey, Russia, Pakistan, Malaysia, and Israel.

Request fax of credit card

For overseas orders ask the customer to fax a copy of their credit card, showing both sides, and a copy of their ID to verify they are the card holder.

You can also take steps to reduce the potential for fraud on your website...

Use secure payment

Always use SSL on your site if accepting credit cards, and don't email sensitive details as plain-text.

Display user information on-screen

Many shops have TV at the entrance with a CCTV picture to show customers entering the store that they're being recorded. The same can be done online to deter fraudulent transactions. Display and record the user's IP and Internet host addresses.

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