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How To Prevent Fraudulent Credit Card Transactions
What Are Possible Signs of Fraudulent Transactions see at Web
Hosting Companies?
- Customer wants to pre-pay for a year
- Domain Name Registration for 5 years or more
- Orders using free email address providers like Hotmail,
Yahoo, etc.
- Usage of multiple cards to complete order.
- International address. AVS can not validate those
international addresses.
- Multiple purchases in a short time period.
- The customer and billing addresses are different.
AMEX, VISA, and MasterCard implemented a security feature
known as "CVV2" and "CVC2". These are the three-digit or
four-digit numbers printed on the back side or front side
(depending on card company) of the card (signature panel) to the
far right. The three/four-digit code helps to validate that the
cardholder has the card in his possession. You can include the
code in your transaction processing and need to receive a match
to successfully complete the transaction. If you are using a
shopping cart for your hosting sign-up process, make sure that it
is capable of collecting and processing these numbers. IMPORTANT:
The ToS of the credit companies state that you are not allowed to
store these numbers.
Use Address Verification Service (AVS) on all US transactions
to verify the billing information provided in the order with what
is on file with the card issuing bank. As a bare minimum, the zip
code should successfully match before the transaction is approved
and you hand out the account information. You should retain the
response information for some time in case of a chargeback.
The possible AVS messages are:
Y - Exact match on street address and 5 or 9 digit zip
code.
A - Address matches, zip code does not
Z - zip code matches, address does not
N - No match.
U - Address information is unavailable or Issuer does not
support AVS. These transactions are only applicable for Visa and
the merchant isn't responsible for chargeback liability.
R - Issuer authorization system is unavailable, retry
later
E - Error in address data - unable to complete check.
G - non-US Issuer not participating in AVS - Visa only. The
error messages will vary from one provider to the next. Contact
your provider for more information.
S - Address information is unavailable or Issuer does not
support AVS - MasterCard only.
The most important warning sign of fraudulent transaction are
international orders. It is very sad to be so generic with this
statement but the percentage of having a fraudulent orders goes
up immediately if the order comes from a non-US location. Be
aware of cities or countries with high rates of fraudulent
transactions. Malaysia, Indonesia, and most countries of the
former Soviet Union tend to be source of many fraudulent
orders.
The most effective way to help eliminate fraud or chargeback's
is to simply call the customer. A confirmation over the phone is
most definitely advised for any large transactions. If you
process a fraudulent transaction, not only do you lose the funds,
but the product/service as well. A phone - even if it is
international will save you a lot of hassle in the long run.
What if you find a transaction to be suspicious? Contact your
authorization center and let them know you are concerned about
the transaction. They will look at the transaction and may give
you advice. You should also call the customer to request
additional information (copy of drivers license or Passport as an
example). Check the IP address of the sign-up and see where it is
globally. Does it matches the customers address at least by
country? Send a confirmation email to the customer verifying
their order.
It may be a good policy to only accept orders with identical
Customer and billing addresses.
Maybe you want to scrutinize international orders as your
protection against these consumers is very minimal and not
accepting them could be a wise choice for your web hosting
business.
Placing fraudulent notices, buttons and images on your web
site and order forms will help discourage any person trying to
place a fraudulent order. Make sure that the customer will se
upfront that you are recoding the IP address and that you will
notify the law enforcement agencies if needed. It might not
protect you in every case but eventually it will help to cut down
the number of fraudulent orders.
This article can be published by anyone as long as a live back
link to http://www.webhostingresourcekit.com is provided.
About The Author
Christoph Puetz is a successful small business owner (Net
Services USA LLC) and international author.
Guides, Tutorials, and Articles for small businesses -
http://www.webhostingresourcekit.com
MORE RESOURCES:
Credit - Google News
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