There is a wealth of information available on how consumers can avoid credit
card fraud. But what about businesses that process credit cards? Advice is not
as plentiful, but just as needed.
card processing companies have done much of the work already,
by making it difficult technically for thieves to treat credit
card processing as an opportunity. Nevertheless, knowing what is being done to prevent credit
card fraud is always a good idea.
And there are also actions that the business itself can take to avoid this
Processing Credit Cards Without Fraud
- Watch Patterns. The behavioral models credit card companies
have developed are marvels of modern science. Credit
card processing is better
fraud-prone because of it. By watching for unusual patterns in the sales
of a business--for instance, a large spark in credit card volume--credit
card processing companies can help identify possible fraud in real time.
Many companies will actually call the business, to make sure that everything
- Verify Addresses. Many credit
card processing terminals have an address verification feature. This is a very small feature
that can make a big difference. On some
credit card processing machines, this feature can be turned on or off.
Keeping it on is the safer option.
- Adequate Training. Processing credit card transactions
may seem like the epitome of easy, but at first, its often not. Some
on the machine, as well
as general training as to how to handle peoples plastic, can help
ensure reliable and secure credit
card processing. Fraud prevention should
a point of emphasis
during training sessions.
- Ask For ID. Of course, businesses are ideally busy,
so this is not always the most efficient practice for every single
situation. A bustling
for example, may not choose to check every ID every time. However,
generally speaking, asking for ID before processing credit card transactions
prevent a large majority of credit card fraud.
- Match Signatures. As old-fashioned as it is, theres
still no substitute for a signature. Businesses that are in the
habit of glancing,
at the signature on the back of the card and making sure its the
same (or close enough) to the signature on the receipt are protecting
The truth is, most thieves dont want to work that hard.
When a consumer has their credit card stolen and used fraudulently, the current
protocol is for the credit card issuer to eat the charges rather than the
consumer. When it comes to credit
card processing at a place of business,
though, things are not so simple.
Exact arrangements can vary quite widely, but the onus is much more on the
business to prove that fraud was not caused by some action that the business
did or did not take. For example, if a credit card company can show that a
business never asked for ID, no matter the situation, they may request that
the business pay for fraud-related damages.
In that case, an ounce of prevention can be worth thousands of dollars of
CARD--Credit Card Industry
Federal Trade Commission