Canada: 7 tips on Fraud and Risk Control for Ecommerce
Now, more than ever e-merchants must reassess and review their risk management and loss control procedures. With internet fraud on the rise again, according to Kroll’s Global Fraud Report – ‘69% of Canadian companies were affected at least by one fraud in 2012 / 2013′ – ecommerce businesses are particularly at risk.
Typically, credit card fraud can result in thousands of dollars in losses but, that’s not all. Fraud also puts your merchant account contract at risk and can damage your business’ reputation.
As fraud attacks are rampant and causing huge losses to merchants, let’s review together how to spot potential fraud and what you can do to safeguard your business.
Identifying fraudulent activities
Most of the online sales are ‘Card Not Present’ transactions; this means that the e-merchant is confronted with a particularly difficult challenge when it comes to verifying and validating credit cards, as the card is not physically presented to the e-merchant for inspection.
So, how can you spot ‘Card Not Present Fraud’?
Here are some of the characteristics or unusual purchasing patterns that you should be on the lookout for:
1.Larger than usual purchases
2.Multiple purchases of the same expensive item
3.Buying the most expensive model
4.Many large purchases in rapid succession
5.Multiple cards used from a single IP address
6.Placing an order using a free email service
7.In addition, pay attention to special shipping requests:
- ‘Express’ or ‘overnight’ delivery
- Shipping to a single address but using multiple credit cards
- Many purchases, using one card, and shipping to multiple addresses
What measures can you take to prevent fraud?
1. First and foremost, make sure that your online store is protected, to prevent potential attacks; that all account information is securely stored and that you work with PCI-compliant processors. Attacking computer systems and databases is the most common method for information theft.
2. As a minimum requirement, online stores accepting credit cards should request customers to enter the security code, called the CVC or CSC or CVV2 usually found at the back of the card. As this type of information is more difficult for cybercriminals to obtain.
3. Ask your Bank/Payment Processor to provide address verification services; checking whether the billing address and the delivery address match. Although, this is not always a sign of fraud, be wary if the addresses don’t match and the card holder requires express delivery.
4. Implement a 3D secure protocol, which requires the customer to create a private code, when paying online. Again, this is something your Credit Card Processor can advise you on.
5. Compare the IP location with the billing address to make sure they’re in the same country.
6. For international customers, obtain an updated list of high-risk fraud countries; you can block the country IP or use geo-location technologies that can help you evaluate which transactions are valid and which are potentially fraudulent.
7. Especially, for expensive items, use a carrier that requires ID and a POD (proof of delivery).
The above list is by no means exhaustive!
If you suspect that a transaction might be fraudulent, it seems obvious but, refrain from shipping your goods without further verification. Check that the billing and the ship-to address match and contact the card holder, if possible.
If necessary, escalate accordingly by following your Processor’ loss control procedure.
Advanced fraud screening with Desjardins’ fraud prevention tools
Desjardins is the largest financial cooperative in Canada. Desjardins and PrestaShop have teamed up and developed a module that comprises a full range of transactions: credit card payments, refund and cancellation.
The module includes advanced fraud protection tools, such as:
- Security code / CVV2
- 3D Secure: Verified by Visa and MasterCard Secure Code (optional)
- Fraud prevention module.
The fraud prevention module helps you limit and block risky payments by applying specific filters that can be configured, according to business’ needs.
With Desjardins, you can benefit from highly competitive rates – exclusively for PrestaShop users:
- Monthly fee: $0
- Fixed rate: 2.52%
- Transaction fee: $0.25
- Purchases deposited within 24 hours.
Desjardins offers robust and secure payment solutions designed to help you mitigate risk; and excellent, bilingual customer service.
The Desjardins’ module is available native in the software or can be downloaded, for free, via PrestaShop’s Official Marketplace. It is compatible with PrestaShop v18.104.22.168 to v22.214.171.124.
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