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Are you wondering how to tell if your business could be a fraud victim? Read more to learn what five telltale signs to look for in your online orders.
Fraudulent payments hurt your business and your bottom line. They can cause major chargeback headaches. Are you tired of having to worry about being a victim of online fraud?
According to Merchant Savvy, payment fraud worldwide has tripled recently. They expect that payment fraud will cost as much as $40.62 billion by the year 2027.
How do you prevent your business from becoming a fraud victim? There are a few indicators that we highly recommend you keep a lookout for. We are going to tell you all about it right here.
Before we tell you about the common indicators, let’s first discuss card-not-present fraud or CNP fraud. Of all the types of fraud, this is one that you see on the rise for merchants.
The biggest challenge with CNP transactions is that the merchant cannot be absolutely certain that the person who is making a payment to them is indeed the authorized user of the card. That is why it is good to look for these common warning signs of potential fraud payments.
1. First-Time Buyer
When you are accepting a payment from a first-time buyer, there is a risk factor. It is unlikely that someone committing fraudulent payments will go back to the very online store that they stole the card from.
You should be especially cautious of a first-time shopper, and we recommend you do some further investigation before accepting the payment. There are fraud prevention tools that can help you with this.
2. Large Purchases
When a card is stolen, usually the customer reports it right away. That is why a criminal will attempt to take advantage of as much as they can in a brief time span. A common tactic that criminals use is to place one large order before they will cancel a card.
3. Priority Shipping
Often, a customer expects a few days of shipping times for their online deliveries. That is why customers will try to ensure that they pay early so that they can save on the cost of shipping.
Criminals, however, do not care about saving money on shipping. They will probably choose the shortest duration for shipping so that they can get rid of the goods they steal as fast as they can. If a customer is purchasing an item to ship internationally, this should warrant further investigation, too.
4. Multiple Transactions in a Short Time
A criminal committing fraudulent purchases will not know a victim’s spending limit, so they will attempt to run it out to its maximum. They will do this by placing multiple orders. Each time, spending a little more.
If you find a “customer” making multiple purchases in a short time frame, this is a red flag with signs of fraud. Plus, if the orders are all being shipped to a unique address, this could be an indicator of a bigger, organized fraud scheme.
People are typical “creatures of habit” with our online shopping behaviors. Therefore, you want to look out for inconsistencies like:
- A different shipping and billing address
- Strange email address
- Postal code and telephone area code mismatch
Anything that appears to be inconsistent could be a type of fraud, so you will want to investigate it.
Don’t Let Your Business Be a Victim of Fraud
If you are tired of worrying that you will become a victim of fraud, Vesta can help. We use advanced data science, technology, and know-how to partner with our customers to eliminate fraud.
Contact us today to learn more about fraud prevention.
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