Ten Top Tips to Preventing E-commerce Fraud

A report by the Centre for Economic and Business Research claims that the cost to the UK economy by 2015 of e-commerce fraud is expected to grow by £30 million as mobile phones and social networking sites create new fraud opportunities. The impact of e-commerce fraud on the UK economy is likely to rise by 18%, from £165.2 million in 2011 to £195.3 million in 2015.

These are serious losses and emphasise the need for companies to focus on this problem when doing business online.

Ten top tips to preventing e-commerce fraud:

1. Display fraud notices. By placing fraud notices in both the content of your site and on order forms you can deter most online scammers.

2. Analyse orders carefully. If an order seems suspicious, check it out. Make sure customers have completely filled out all information and that all of the information matches.

3. Verify addresses where possible. Not always possible, but if a large order seems to be going to a domestic address or the company ordering has no checkable address - be cautious.

4. Get card CVC2 and CVV2 verification numbers and expiration dates. On the back of MasterCard, most Visa and Discover credit cards is a 3-digit security code located right after the credit card number. American Express cards also have a similar security code that is located on the front of the card right above the cardholder's account number and is usually 4-digits long. The majority of online payment processors support entering security codes when processing credit card orders.

5. Be vigilant about orders that are from outside the UK and EU. Since a large majority of fraud comes from Asia and Africa, you need to be extra careful about accepting orders that originate from there. It is harder to enforce your rights in jurisdictions in these areas.

6. Be suspicious of orders that use a free email address. Free email addresses are easy to get and require little information. The majority of people committing fraud will use them to hide their identity. Some of the most common free email addresses are from yahoo and Hotmail.

7. Check negative lists. You can use these lists to check mailing address against a database of addresses associated with past chargebacks or fraudulent activity.

8. Use fraud prevention software. There are software programs that traders can use to automatically check orders to detect possible fraud. The free tools provided by Visa and MasterCard that can help with fraud prevention.

9. Keep records of all interactions with customers. Save all e-mails and voicemails. Also use caller ID and try to have all calls with customers recorded. These extra precautions will help keep you safe in a case where you might need to fight fraud or chargebacks.

10. Call and or e-mail the customer. Speaking directly to the customer is the best way to clear up any confusion.

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