If you run an online business, you'll probably be vulnerable to online fraud. In fact, it is estimated that online merchants lose a combined amount of more than $ 2 billion annually, and if statistics are anything to go by, the problem is getting steadily worse. These figures are alarming by anyone's standards, so in this short article we'll take a look at seven tips which online merchants can use in order to avoid becoming a victim of online credit card fraud.
Tip No1
Try to avoid doing business with citizens residing in "high risk" countries. When it comes to e-commerce, there are several countries which are considered to be a higher risk than others, based on the number of cases in which citizens of these countries are involved in online credit card fraud. There are several online resources available which one can check in order to see a complete list of high risk nations, but the worst countries tend to be the following:
– Nigeria
– Russia
– Malaysia
– Turkey
These are just a few of the high risk countries, but online merchants should also exercise extreme caution when dealing with customers from Africa and Eastern Europe.
Tip No2
Merchants can compare a customer's IP address to the customer's billing address. Remember, a person's IP address shows the exact location of the computer they're using. If the IP address is at a location which is a significant distance from their billing address, your alarm bells should immediately start ringing.
Tip No3
Always demand that a customer provides you with a phone number. You will then be able to call the number in order to determine whether or not it's a valid number. You'll also be able to establish whether or not the area code of the phone number coincides with the customer's postal code.
Tip No4
Make it your business's policy not to ship goods to any type of address apart from a physical address. In other words, make it known to all potential customers that you're unable to ship goods to a PO Box address. Those who commit online fraud need to take possession of the goods they purchase, but at the same time, they also have to remain anonymous, and a PO Box address allows them to do just that.
Tip No5
Contact the credit card company if you have any reason to be suspicious about a particular customer. By getting in touch with the credit card company you'll be able to confirm whether or not the credit card has been reported stolen, or if there's anything to suggest that the card has been involved in fraudulent activity.
Tip No6
Online merchants should never be afraid to request additional information from a potential customer. If the customer is genuine and sincere, they will understand you have reason to be concerned, and as such, they will be willing to provide you with any additional information you require. For example, you can insure that you would like to speak to them over the phone in order to confirm their contact details. Alternately, you could also inform them that they need to send you a copy of their photo ID This could have been a copy of their passport, or even even a copy of their driving license.
Tip No7
If you run an online business you should also treat free e-mail addresses with a certain amount of caution. Of course, there are millions of people around the world using free e-mail addresses, and for the most part, these people have no ill intentions. Unfortunately however, those who get involved in online fraud will always make use of such e-mail addresses. The only way for you to get around this problem, is by checking other details such as a customer's telephone number, IP address, and of course, their billing address.
While the seven tips discussed above certainly will not be able to offer complete protection against online credit card fraud; they certainly can help to minimize the risks.
