Basic steps you can take to combat fraud

If the idea of your business being defrauded keeps you up at night, there are steps you can take to prevent it. Read on for some tips to help you combat fraud.

Make no mistake; fraud is a real concern for your business, and one that you should take seriously. Because of this, we’ve put together a list of tips to help you protect your business

1. Get the card’s verification number

Where possible, get the three or four-digit card verification number from the cardholder. This is the code printed on all Visa, MasterCard and American Express cards. It’s often referred to as the CVV.

To maintain the card’s security, don’t store a customer’s CVV in your system.

Requesting the CVV when a card’s not present can increase a transaction’s security.

2. Internet transactions

Does your business operate eCommerce? Where a cardholder is entering in their card details, they must include the CVV.

Doing this helps to verify the person placing the order has the card in their hand.

3. Check contact details

If the customer has supplied their telephone number, check for an area code. This is a simple starting-point to check for legitimacy. It’s not to say that the absence of an area code means you’re being defrauded, but it’s a warning sign that should get you thinking.

Do an online search for reverse look-up services. This is another good way to check for a legitimate number.

4. Set-up a 'negative list'

If you’ve been a victim of fraud before, you should have your own black list. This way you can effectively leverage your own customer history data.

Add all fraudulent transactions to a list, and keep it up-to-date. Make sure you list all details of the transaction, and why you consider it fraud. Any other orders with similar characteristics should be considered suspicious.

You can sometimes do these tests automatically. This often depends on your technical infrastructure. Check to see if you can connect with fraud prevention service providers. This way, instead of manually reviewing each order, it’ll perform automated internal screening. Or it’ll engage a third-party tool to screen for questionable transactions.

Getting it automated is often more cost-effective than doing it yourself.

This article was originally published in Talking Shop Winter 2012

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