E-Commerce Credit Card Processing Suspicious Transactions

E-commerce credit card processing retailers should devise internal policies and procedures for managing out-of-the-ordinary or suspicious transactions and provide sufficient training for their sales personnel. Being able to identify suspicious transactions may be especially important for merchant account users involved in telephone payments, and employees should be provided clear instructions on the procedures to take to validate these transactions.

Your sales staff needs to be looking out for any of the following indicators of suspicious consumer behavior:

• Hesitation. Look out for customers who hesitate or are uncertain when providing you with personal details, such as their ZIP code or the spelling of their street or last name. This is usually a sign that the customer is using a false identity.
• Rush orders. Requests for a quick or overnight shipping - the consumer who needs to get the product immediately - should provide another red flag for probable fraud. While oftentimes completely valid, rush orders are among the most common signs of "hit and run" fraud schemes designed for obtaining products for a quick resale.
• Random orders. Look out also for consumers who don't seem to pay much attention if a given item is not in stock. To reiterate, sales of this type may be designed for resale rather than for personal use.
• Suspicious delivery address. Examine and flag any sale with a shipping address that is not identical with the billing address on the consumer's account.
  • Requests to deliver products to P.O. boxes or an office address are not seldom linked to fraud.
  • Keep track of ZIP codes associated with high fraud rates and validate any sale that has a delivery address in these locations.
  • If your e-commerce credit card processing organization does not usually service international customers, be cautious when delivering to addresses outside the U.S., especially if it is a new customer or a rather large order.

In evaluating what looks to be an atypical order, bear in mind that if the order looks too good to be true, it most likely is.

Historical evidence suggests that online orders with these characteristics can be indicators to possible fraud. Suspicious web-based transactions are much like those in other non-face-to-face settings, although the web provides additional opportunities for online scams. The above list of possible fraud characteristics - compiled from the lists of industry experts - is provided to help you prevent fraud. An e-commerce credit card processing transaction with any one of these signs by itself is rarely a cause for alarm. When you discover several of them, this may be telling you that fraud may be taking place.