5 Tips for Fraud Management

During times of uncertainty, bad actors will take advantage of the fear and vulnerabilities of consumers. According to the Federal Trade Commission’s Consumer Sentinel Network, nearly 50,000 scams related to COVID-19 have been reported. From travel and online shopping to phony small business loan sites and coronavirus miracle cures, scammers are collecting personal data and credit card information. The pandemic has created an environment for fraud to thrive.

Being aware of various methods of frauds is key to keeping your business safe as well as your customers. To safeguard your company’s assets, ensure there is a system in place to deter and detect fraud and theft. This includes internal controls with your staff and accounting as well as security tools to secure online transactions.

  • Set up a reporting system. It’s key that your organization has a fraud prevention plan in place to minimize fraud occurrences, both internally and externally. Every member of your organization should be informed about the fraud risk policy, trained on anti-fraud measures and the consequences associated with engaging in criminal behavior. 
  • Establish dual authentication. There’s been a surge of multiple new accounts created that’s tied to the same user account. This creates an opportunity for fraud as an account looks legitimate once it’s in the merchant account.  Ask customers to confirm account creation and purchases in addition to reviewing their purchase history on the account. 
  • Defend against card testing. Sophisticated scammers now use computer-generated scripts to test thousands of credit card credentials at a time. The goal is to find a valid credit card and then make large purchases in the future. Make sure your checkout page includes technologies to prevent automated scripts from submitting transactions. These include firewalls, CAPTCHA and a visual challenge. 
  • Monitor account takeovers. In addition to card testing, fraudsters will also target profiles with saved credit cards. A few patterns to look for include multiple shipping address changes on older, dormant accounts and many small purchases in a short time period.
  • Accept EMV chip cards. Europay, Mastercard and Visa (EMV) card is a global standard card-based technology in debit and credit cards to authenticate transactions and fight against fraudulent activity. Merchants with brick and mortar stores will do more to protect customer data, avoid liability and prevent fraud with chip card capabilities. Additionally, take steps to physically protect your point-of-sale system to avoid tampering done by staff or any new threats with devices built to capture card data and EMV chip cards.
Hacker in hoodie sitting at computer

It’s your responsibility to perform additional checks to ensure transactions are above board and make sure things don’t fall through the cracks. You don’t want to help scammers cheat the system. But if there is fraud, always report it. It’s always best to have open lines of communication with all parties involved – card company, card holder and authorities if necessary – and refer to the issuer guidelines to make sure the appropriate steps have been taken.

With an increase in online shopping, having the right ecommerce tools will help maintain a safe and secure experience for customers. Without taking preventative measures, you can lose out on revenue and risk damage to your brand, while cardholders are in danger of damage to their personal security. As a business owner, you want to find the right balance between accepting transactions to grow your business and managing fraud.

With ReliaFund, we build security and compliance into our payment solution systems. From securing customer information and maintaining standards to streamlining the entire online payment processing process, we make it easy for businesses to protect data. Contact us and schedule a free consultation to see how our electronic payment services can provide the security you need.


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