How to Accept Credit Cards Over the Phone Securely

Card-absent merchants that accept credit cards over the phone should establish certain procedures for responding to and handling suspicious transactions. Merchant account users need to make sure that their sales staff is familiar with the following procedures and receive constant training on them.

For suspicious mail order and telephone order (MO / TO) transactions, retailers that accept credit cards over the phone should:

• Make a Code 10 Authorization call. A separate telephone call to the retailer's acquirer's authorization center asking for a Code 10 authorization lets the processor know that there are concerns about a transaction.
• Ask the consumer for additional data: For instance, ask for the day-time and evening phone numbers and contact the customer back later. Some retailers ask for the bank name on the front of the card.
• Separately confirm the transaction with the consumer: Send a note to the cardholder's billing address, rather than the shipping one.
• Use directory assistance or web-based search services to locate or verify a cistomer's telephone number. Do not use the phone number provided by the cardholder for a suspicious transaction.
• Confirm the order, resolve any existing discrepancies, and let the customer know that you are performing this verification as a protection against possible fraud.

When asking for some additional information to validate orders, employees that accept credit cards over the phone should use a regular conversational tone so as not to raise customers' suspicions. If a consumer balks or asks why the data is being requested, employees should tell them that they are attempting to protect cardholders from the high cost of fraud.

As always, common sense is your best protection against fraudulent attacks. Trust your instincts! If an order seems too good to be true, it most likely is. We hear all the time that what a retailer thought was a great sale soon turned out to actually have been a fraud. So invest the time to check out that great order that is being shipped halfway around the world to someone with whom you have never done business before. Some additional extra work may well protect you from being the victim of a fraud scheme.

Contacting consumers directly not only minimizes fraud risk, but also improves customer confidence and loyalty. The retailer's order verification procedures need to address the need both to identify fraud and to leave genuine customers with a positive impression of their organization.