The Fraud Squad

Simple things to do to keep credit card and check crimes to a minimum
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This story appears in the June 2000 issue of Startups. Subscribe »

If you think credit card authorizations or check guarantees ensure fraud-free purchases, think again, because you can get stuck with the losses. You're particularly vulnerable as summer ushers in schedule changes, vacations and more relaxed attitudes-and rip-off artists step up efforts to circumvent security measures. There are some simple things you can do to keep credit card and check crime to a minimum.

First of all, if you're a retail merchant and you don't use a POS terminal, keep a manual imprinter on hand for credit card transactions, advises Debbie Johnson, manager of security at Electronic Clearing House Inc. (ECHO) in Agoura Hills, California. "It's evidence that will protect you from most charge-backs," she stresses. If the imprint isn't clear, hand-write all info on the sales draft.

Secondly, ensure that the signature on the card matches the cardholder's embossed name as well as the signature on your sales slip, Johnson says; if you use a POS terminal, also check that the account number on the credit card matches the number that prints from the POS terminal. When in doubt, ask for identification. If you take credit card orders over the phone, in the mail or on the Internet, Johnson also suggests the following:

  • Ask for the cardholder's name and telephone numbers at home and work. (Indicate that you will call before delivery-crooks hate that.)
  • Require a signature when orders are delivered; ship only to the cardholder's billing address.
  • Fax the completed purchase order to the customer, if possible, and have it signed and returned with a copy of the person's photo ID and credit card (both sides).

These and other tips are detailed in 10 Ways to Beat Credit Card Crooks, a free pamphlet available from ECHO (800-262-3246). As for a credit card authorization, it doesn't prevent a sale if the card hasn't been reported stolen, says Johnson. Similarly, check guarantee services don't always make good on bad checks unless a series of conditions are met. Requirements vary by company.

Paul DeCeglie is a former staff reporter for Journal of Commerce and American Banker.

Contact Source

Electronic Clearing House Inc.,

Edition: July 2017

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