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Scram, Scam!

If you sell on the Web, know that fraud is part of the e-commerce game. Don't let thieves get the best of you.

Keith Peer, owner of Central Command Inc., knows all too well the risk of doing business on the Web. An online software merchant near Cleveland, Central Command offers antivirus software to consumers who have been attacked by hackers, crackers and other online scammers. Before Peer set up his Web site back in 1994, he took several precautions to make it as virus- and fraud-free as possible. His first step was to choose an e-commerce vendor whose system came complete with software to check for fraud.

Peer also did some checking of his own, keeping a close eye on two kinds of buying activities that could indicate fraud. One indicator was the purchase of multiple licenses without testing the software. (It's common practice for software buyers to download a free trial version before making a multiple purchase.) Another indicator consisted of orders from areas with high incidences of fraud, such as Miami, Los Angeles and former Soviet Union countries. In both cases, he'd check and recheck credit card numbers to ensure they were legitimate.

Today, Peer's Web site is virtually fraud-free, but he still hasn't let down his guard. "As soon as we went online, we started experiencing attempts by consumers to use fraudulent credit card numbers," says Peer, 33. "And we still see the same traits over and over. It's an ongoing problem, but it's a fact of life in the e-commerce world today."

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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the December 1999 print edition of Entrepreneur with the headline: Scram, Scam!.

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