Proceed With (Credit Card) Caution
Reducing credit card fraud can save your company thousands of dollars. Here's a list of eight sure-fire strategies any entrepreneur can use to reduce credit card fraud, according to Audri G. Lanford, an Internet scams expert and co-editor of the newsletter Internet ScamBusters (http://www.scambusters.org):
1. Take extra steps to validate each order. Don't accept orders unless complete information is provided, including the full address and phone number of the customer.
2. Be wary of orders with different "bill to" and "ship to" addresses. Require anyone who uses a different "ship to" address to send you a fax with their signature and credit card number authorizing the transaction.
3. Be especially careful with orders that come from free e-mail services, such as hotmail.com, juno.com and usa.net. There's a much higher incidence of fraud from these services because it's easy for a scamster to open a free, anonymous e-mail account in another person's name and then send you an order using a fake e-mail account and a fraudulent credit card number.
4. Beware of orders that are larger than your typical order amount and orders requesting next-day delivery. Of course, some people have reasons for placing large orders or using next-day service--but you should still be cautious. Crooks don't care what it costs since they aren't planning to pay for it anyway.
5. Examine international orders carefully. Do everything you can to validate the order before you ship your product to a different country.
6. If you're suspicious, pick up the phone. First, obtain the phone number that's listed with the billing address of the cardholder. Then call the cardholder so you can determine whether he or she placed the order.
7. Use software or services to fight credit card fraud.
8. If you have the misfortune of being scammed by a credit card thief, contact your merchant processor immediately.