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

In The News:

pen paper and inkwell


cat break through


Warning: Free Credit Report Imposter Websites Springing Up on the Web

A recent amendment to the federal Fair Credit Reporting Act... Read More

Avoiding ID Theft and Credit Fraud

Article excerpted from the new book, "How to Do Space... Read More

Collection Agencies: What Do They Do?

Collection agencies are businesses that collect past-due bills and accounts... Read More

Minimum Credit Card Payments to Rise

For years, major credit card companies have allowed cardholders to... Read More

Free Credit Reports: From The 3 Major Credit Bureaus!

Get your credit report online for FREE. Many financial advisors... Read More

Will Inquiries Lower Your Credit Score?

What are inquiries?When you apply for credit the creditor or... Read More

Saving Money with Credit Cards

Having a credit card is a wonderful convenience for those... Read More

How to Save Money on Your Credit Cards

Credit card companies make their money on the 85% of... Read More

Cash Advance ? How Does It Work?

If you want a cash advance or a payday/paycheck loan,... Read More

Five Reasons to Repair Your Credit Score - You Can Do It Yourself

There are multiple reasons that tell us why we should... Read More

Teaching Students To Keep Out Of Credit Card Debt - The Parents Role

Parents have the full responsibility for their children and their... Read More

Credit Reports: Find out why you have been refused Credit.

You may already have 2 or more credit cards in... Read More

Credit Score ? for Scoring the Right Loan

Somebody once said, "There is always a way of knowing... Read More

Dealing With and Repairing Bad Credit

Bad credit can be a burden for otherwise good credit.... Read More

Bad Credit? No Credit? Yeah, Its a Problem.

Many companies use the slogan "Bad Credit? No Credit? No... Read More

How To Start A Second SEPERATE Credit File!

Your personal credit file is separated from those with the... Read More

Credit Card Balance Transfers Explained

What is a balance transfer ? A balance transfer can... Read More

Low Interest Credit Cards: A Thing of the Past?

With interest rates rising, low or zero percent credit cards... Read More

Ethical Finance: Who Benefits From Our Spending?

On one hand consumers are being universally criticised for running... Read More

Legislators Ponder New Credit Protection Laws

Legislators in Washington, D.C. are considering several credit-related consumer protections... Read More

Credit Help for Real Estate Financing: Credit Scores

When you buy real estate, lenders run all of the... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time... Read More

Can You Acquire Good Credit Overnight? You Bet

Your credit file may not reflect all your credit accounts.... Read More

Tackling Bad Credit

The first time I heard the term credit history was... Read More

Start Building Credit Fast!

There are a couple of reasons for this. You can... Read More

Know Your Credit Card Rights

When you apply for a credit card, the application that... Read More

All About Balance Transfers

What is a balance transfer?A balance transfer can be explained... Read More

Identity Theft ? Who Would Want Mine?

With all my bills who would possibly want my credit?... Read More

What is a Credit Card?

A credit card allows you to buy things even though... Read More

Pitfalls of the Credit Industry

The credit industry if rife with pitfalls. If you have... Read More

Credit Problems? Heres How to Manage Your Creditors

If you find that creditors are calling you almost daily... Read More

The Credit Card Surprise That You Need to Look Out For

Companies that issue credit cards want to make a profit.... Read More

Free Credit Report ? Watch Out for Scams

Many people may still not be aware of an amendment... Read More