Suspicious transaction monitoring should be a core component of any payment security strategy. By paying close attention to red flags and suspicious activity, you can avoid merchant services fraud. Listed below are the top ways merchants in the retail and internet environment can monitor transactions and identify potential fraud.

Red Flags – Be Suspicious of Fraudulent Transactions If:

Internet environment

  • Shipping address does not match billing address
  • Purchaser attempts to circumvent your usual payment process (e.g. sending credit card information via email rather than entering it on your website)
  • Order is for an unusually large amount of items
  • Purchaser wants items rushed or shipped next day shipping (this is not necessarily suspicious on its own but is very suspicious along with other red flags)
  • Order is from another country – particularly if you sell items that could be easily obtained in any country
  • Customer tries different expiration dates after initial decline
  • Customer purchases large amount of the same item
  • Multiple orders come in with same shipping address but different cards

Retail environment

  • Customer makes a large purchase without usual regard to details of items or price (e.g. clothing in all different sizes, styles)
  • Customer makes major purchase without asking questions
  • Tries to rush sale or distract cashier
  • Customer makes purchase then returns later to purchase more
  • Arrives right when store opens or right before closing
  • Customer pulls credit card from pocket instead of wallet or purse
  • Requests that card is keyed rather than swiped
  • Customer is slow or deliberate with signature
  • Refuses free delivery of large items

What To Do if you Suspect Fraudulent Transactions

Internet environment

STEP 1: Any time you detect a fraudulent transaction, we strongly suggest that you do not run it or void it until you are comfortable. If the transaction has already been run and batched out, wait to ship the product until you have verified the transaction.

NOTE: If you are suspicious of a transaction that hasn’t been batched out yet, we suggest you void it because if you end up refunding it you will still be liable for the processing fees for the original transaction and you run the risk of a chargeback.

 

STEP 2: Contact our risk department. They can be reached at 800-675-6573 Option 5.

Retail Environment

Ask the cardholder for identification and if they do not provide it, do not proceed with the sale.

Retail Payment Processing Systems

Ways to Verify the Validity of a Transaction

Internet environment

  • Do a Google maps search of the shipping address to make sure it is not a UPS store or other parcel forwarding service
  • If you have a phone number or email address, do a Google search of it in quotes (e.g. “773-555-9136”) which will only bring up exact results
  • Identify the card-issuing bank using the first six digits of the card and call the card-issuing bank to verify the name on the card and billing address, they will be able to answer yes or no if the address and name you have are correct. You can identify the bank at binbase.com.
  • If the information seems to match and only the shipping address is different, use websites such as 411.com to find an alternate phone number for the cardholder based on their name and address
  • Call the cardholder to ask about the order – sometimes a credit card thief will give the actual cardholder’s phone number and other times, it will go to a disconnected number.
  • Do a reverse IP address search to verify that the purchaser is in the same city and state that they are purported to be in
  • Request documentation from the purchaser. Some examples are: a copy of the front and back of the card or a copy of the cardholder’s ID

Retail environment

  • Ask for identification
  • Verify that signature is the same name on the card, if it looks different ask for identification
  • Check the card’s security features

Embossing

First 4 digits of card number printed below embossed number, these numbers must match
Check to see if there are “ghost images” of embossed numbers that have been removed

Hologram

Check to see if hologram is intact, if card has been re-embossed hologram will be damaged