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Anti-Fraud Measures for Your Site

Outsmart the bad guys with these anti-fraud tactics for your site.

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This story appears in the September 2006 issue of Entrepreneur. Subscribe »

Online fraud rates might be going down--finally approaching the levels of brick-and-mortar stores--but fraudsters are getting more sophisticated. These were the key findings of the Merchant Risk Council's fifth annual survey released in April. The Austin, Texas, council consists of 7,500 merchants, vendors, financial institutions and law enforcement agencies.

Card-present fraudulent chargeback rates are usually less than 0.1 percent of sales, and 48 percent of the online retailers surveyed said their chargebacks match that rate--a significant improvement over 2004, when online fraud outpaced card-present fraud by as much as five times. "The numbers show a very positive trend, but fraud still requires vigilance from online retailers," says Julie Fergerson, board member of the Merchant Risk Council. Fergerson's fraud-prevention tips:

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