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Preventing Credit Card Fraud

jjensen | 21 November, 2005 22:17

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Preventing fraud with credit cards takes place long before a DRTV marketer realizes that someone has just stolen their merchandise. Many times, the key to success comes years earlier when the marketer selects their merchant provider and sets up their credit card processing guidelines.

A sophisticated merchant provider, or payment processor, has the ability to give tools and wisdom to their customer to help them prevent fraud.

One example of how to prevent fraud is the ability to accept or deny customer orders when the shipping address does not agree with the credit card customers billing address. If the person on the phone is the real customer, why would they not know their own billing address? Yet the inability to pass this test is one of the top practices that results in fraud.

Another powerful example of how to prevent fraud is the ability to collect and process payments only if the customer supplies the CVV code. The CVV code is the 3- or 4-digit number found on the back of a credit card and is an additional security method used for transactions taken over the phone or internet, which are also called “card-not-present” transactions. These card-not-present transactions are especially prone to fraud because the customer is not standing in front of you with their credit card and ID in hand. This simple step helps offer protection against customers who attempt to process a transaction paid for by a stolen credit card.


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