How to Guard Against Credit Card Fraud on Your Website

Identity theft is not just a problem for the consumer; it is just as much of an issue for businesses that accept credit cards. Since it is much easier to commit credit card fraud on the Internet than in a brick-and-mortar store, e-commerce sites have to be particularly careful about how they do business. Following are several tips on how to guard against credit card fraud on your website.

Credit Card Fraud Tip #1: Require the Verification Number
By now, you've probably made at least one Internet purchase during which you were asked for the three- or four-digit number on the back of your Visa or MasterCard. This is what is known as the CVV (card verification value), and is meant to protect against Internet credit card fraud. If you offer products for sale on your website, requiring the verification number will help to control the theft of card numbers.

Credit Card Fraud Tip #2: Contact Customers if You Are Suspicious
There is no law that says a website purchase has to remain over the Internet. Hopefully, you have collected the customer's contact information through your website (name, address, phone number, etc.), so you can call that customer and verify the transaction. If you receive a number that is disconnected or if the person who answers doesn't know what you are talking about, you should cancel the transaction immediately.

Credit Card Fraud Tip #3: Pay Attention to Conflicting Addresses
When you sell merchandise on your website, you should be requesting both a billing and a shipping address. If the two are different, it should send up a red flag. Obviously, many of these instances will be completely legitimate; if the customer has recently moved or if he wants the product shipped to another location, the addresses will be different. However, if you have a billing address in California and a shipping address in New Jersey, you might want to go the extra mile to verify.

Credit Card Fraud Tip #4: Use an AVS System
Another way to guard against credit card fraud on your website is to use an AVS (automatic verification system). This matches the zip code entered by the customer with the zip code on his or her billing address. If it doesn't match, the purchase doesn't go through.

Credit Card Fraud Tip #5: Beware Webmail Users
There are plenty of cases of credit card fraud that include webmail users, which means that the customer signs up for a free e-mail account -- such as Yahoo! or Hotmail -- rather than a paid e-mail account. Since these e-mail addresses aren't tied to the user in any way, they facilitate credit card fraud. Of course, I have a Yahoo! account, and so do other legitimate customers. Just beware if there are other red flags in conjunction with a webmail account.

Source: Associated Content

Credit Card Fraud in Criminal Law

Consumer fraud – specifically credit card fraud – affects approximately twenty-five million Americans each year according to recent statistics. It is one of the easiest types of fraud for experienced criminals to commit, and unfortunately, many citizens do not realize they have been victims until years later.

Credit card fraud is the act of using lost, stolen or inactive credit cards for financial gain. It can also involve identity theft by securing a credit card in someone else’s name and using it yourself, which is a felony and punishable by up to twenty years in prison. Credit card fraud happens in businesses, at ATM’s, over the phone and on the Internet, though the most common occurrence over the last three years has been Internet credit card fraud.

The Federal Trade Commission alone handles more than 500,000 complaints of credit card fraud each year. They, along with other government and private organizations, work toward educating the public about protecting their identities as well as toward capturing criminals.

One of the major problems is that the average American has five different credit card accounts. We are notorious for pulling random credit cards from our wallets and using them to make purchases without matching receipts to specific numbers or recording those purchases for future reference. If credit card holders don’t pay attention to their bills, they might not catch instances of credit card fraud.

Further, the Internet has made it much easier for criminals to discover and use credit card information. Since Internet websites cannot request photo identification to match consumers with credit cards, it is possible to rack up numerous purchases on someone else’s credit card. Most people – myself included – have received fraudulent e-mails requesting password and account information, supposedly from the bank where they hold their credit cards. Answering such an e-mail and divulging that information could result in credit card fraud.

Although organizations like the Federal Trade Commission do what they can to protect consumers from credit card fraud, it is ultimately up to consumers themselves to do whatever they can to protect their credit. This might include being careful when making Internet purchases, keeping track of all credit cards at all times and keeping an eye on one’s credit report.

Those who are prosecuted for credit card fraud face up to twenty years in prison and fines equal to that which they stole. Credit card fraud is a felony which can be tried in either a state or a federal court; typically, credit card fraud that occurs over multiple state lines will be prosecuted by federal law enforcement rather than in state courts.

Further, the victims of credit card fraud can civilly sue the criminal who used their name for credit card fraud purposes.

Source: Associated Content