Last week I reviewed how some of these hackers are gaining access to confidential and personally identifiable information from retail locations. What happens to the credit card numbers of those affected? While most physical retail locations require some form of identification if there is a physical stolen card, the proliferation of online purchasing has made it increasingly difficult for merchants to ascertain stolen credit card information. According to FraudLabs website, there was approximately 2.6 billion dollars in merchant cost due to online fraud in 2004. Yes, you read that right, this statistic is in the billions - and the data is 10 years old. So what's an online retailer to do?
Here are some tips for an online merchants to reduce the chance of fraudulent purchases:
1. Geolocation by IP Address - this technology can locate the physical address of the computer used to purchase online goods. It can be used to examine the distance between the billing address and the computer. Legitimate customers will not be deterred by legitimate authentication measures, which will protect them from credit card fraud also and keep the costs of doing business on the Internet down, especially if the customer is properly informed and advised.
2. Check whether an anonymous email address, or proxy internet server was used - Anonymous proxy servers and email addresses allow Internet users to hide their actual IP address. The main purpose of using a proxy server is to remain anonymous or to avoid detection. While well known businesses use this to protect internal networks, fraudsters hide themselves behind anonymous proxy servers
3. Check if the mailbox used is a ship-forward address or PO Box - since the criminal would need place for the inventory to be sent, a physical address or PO box location is a must. A way to conceal the true identity of the purchaser is to use an anonymous physical address.
Of course, with all of these examples, the customer could be a legitimate customer who values privacy on the internet. So when in doubt - it is best for the online merchant to request more information from the purchaser. Calling or faxing the customer would aid in further authenticating their identification.
Check out the rest of the tips for online merchants here:
https://www.fraudlabs.com/fraudlabswhitepaperpg1.htm
- Angie
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