How Credit Card Fraud Affects Merchant Account Holders

A merchant account can be a very valuable and convenient tool to the lifeblood of your business. By being able to take credit and debit card transactions, you make life much more convenient for your customers. And a customer, who feels like you are meeting their convenience needs, is one, who will likely spend more money. First of all, it could make you legally liable to customers.

If the customer has set up an alert in place and you have failed to act on it, then you are faced with losing the merchandise and the money. There are no real guarantees in place to protect you, in other words. Since this is the case, you can see how necessary it becomes to police credit card fraud as much as possible.

Luckily, there are many things you can do to prevent the occurrences and to protect yourself in the event that a chargeback is sent your way. The most important thing that you can probably do is enroll in a credit card number lookup service that stays updated and offers you some insurance of their records. Too many businesses look for bargain basement providers, and then think they will be protected in the event of fraudulent activity. The time has come, if you are guilty of this, to realize that not all databases are created equally.

Rather than roll the dice for a few dollars off, make sure that your plan is as updated as it can be, so you can be mindful of chargeback potential before it becomes a reality. Also, if you have any kind of business, where your employees come face to face with the public, then you need to exercise photo verification.

While a lost or stolen card can still be used due to the verification code on the back, it's hard to justify allowing a purchase if the holder of the card is unable to prove they are, who they are. Most customers understand this and will not judge your business for it. Most of the time, it will result in you winning customer loyalty and incurring less instances of chargeback. That means every transaction that happens is a done deal and money in the bank that you can count on.

CNP transactions can be conducted when orders for goods, travel or accommodation are placed telephonically, by internet, mail order or fax. Lost Card Fraud refers to fraudulent transactions conducted on a valid issued debit or credit card after the card holder has lost his or her card. Stolen Card Fraud refers to fraudulent transactions performed on a validly issued debit or credit card that was stolen from a legitimate owner. False application Fraud occurs when fraudulent transactions are conducted on an account where the card was acquired by falsifying a card application.

Since the introduction of legislation such as FICA and the NCA, banks have become more rigorous in application verification procedures and False Application Fraud has declined by over 90% from the 2007/2008 high. Account Takeover Fraud occurs when a perpetrator poses as the legitimate account holder and takes over someone’s account and then uses the account for their own benefit.

Access to personal information is used by perpetrators to pose as their victims for both Account Takeover Fraud and False Application Fraud. Not Received Issued Cards Fraud relates to validly issued credit and debit cards that are intercepted before they reach the authentic customers and used for fraudulent transactions. Always follow your card and never let the card out of your sight when making payments. Report any suspicious behaviour by the person to whom you have handed your card when making payments immediately to your Bank.

Never accept help from anyone at an ATM, even people who appear to be bank staff or security. Be familiar with your ATM construction, this way you will notice any foreign objects attached to it. Never use an ATM that is tampered with or visibly damaged. This could be a trick to get you to use another ATM in close proximity where a device is mounted.



Suspicious foreign objects or people loitering around ATMs should be reported to your bank immediately. Always check your bank statements for suspicious transactions. Shred or burn bank statements, receipts and financial information when disposing of them. Never let another person use your card and do not leave your card or your card details lying around. Never divulge your PIN to anyone. Make use of the card security products offered when transacting with online merchants. Ensure you only place orders with your card on a reputable and secure website when shopping online. Do not send e-mails that include card details such as your card number, expiry date or other details. Report any irregular transactions on your bank statements to your bank immediately.