Business Alone

Is there anything a business owner can do to secure his financial transactions? Can the owner actually prevent and guard against financial fraud by the most cunning criminals?

Awhile back I read an article on the subject by writer Michael Bloch. I took a few notes and would like to summarize his points here. I'm sorry that I don't have a copy of that original article, in fact, I don't even remember the title.

But I can relate his bullet points from my notes and give you the summary of his thoughts on the subject, hopefully to assist you in securing your business transactions.

1- Request information. Often the merchant account processor will suggest what information is acceptable but you can always gather additional data that will add to your records for each transaction.

2. Be aware of email addresses. Most criminals will not use their own email addresses which are easily hidden and fake addresses forged. Free web servers enable
fraudsters to easily operate on false contact information and from anonymous locations. Be especially careful with addresses coming from Yahoo, MSN, Hotmail, etc, and other large sites where email addresses can be had by anyone in just a few clicks right on the spot.

Some Internet merchants are actually refusing to process or deal with these "free" email addresses because they are so "convenient" for use by those who don't want to be tracked.

3. Compare the shipping and billing addresses of the customer. Unless a gift item is being sent to a family member or friend, the shipping and billing addresses will generally be the same. Of course, you should consider billing addresses here in the States with a shipping address overseas to be a waving red flag.

I had a personal experience with this type of fraud. One day while at work, a camera store merchant called my office here in the States to ask if I had ordered several thousand dollars in digital camera equipment and accessories with the intent to have all the merchandize shipped to a small town in Russia.

Needless to say, that was not my intent and the merchant didn't make the shipment when I explained that I hadn't sent her that order and didn't authorize my card's use for any such purchase. After several months of hassle, I was able to get all the charges dropped from my hijacked credit card account number - but it was not a pleasant experience.

4. Analyze your web log files. Employ a 3rd party service that will track your site traffic and help you locate the origin of visitors to your site. Some hosting services will also provide varying levels of site statistics so that you can better analyze who is coming to your store.

This is not a total fraud solution, but it can warn you of possible ordering fraud and also help you track down the point of origin of those making the order.

5. Be wary of overseas orders. Let's face it, orders for your merchandise can be risky if coming from outside the U.S. and especially from certain 3rd world countries. No offense, of course, to the people living in less developed countries, but foreign governments often do not hold to the same postal and Internet standards as the U.S.

And if fraud does occur, how are you going to go about getting your merchandise back or your money back, for that matter? How are you going to track down foreign criminals on the opposite side of the globe?

Increasingly, businesses are refusing to process orders from certain "high risk" countries in eastern Europe, Indonesia, Malaysia, Africa, Turkey, Pakistan and Israel.

6. Investigate unusual orders. Very large and expensive orders that are to be shipped "Express" or as fast as possible should be given some increased scrutiny, especially if it is a first time order from a new customer.

Of course customers like to be treated as being honest and loyal, but most will understand if you ask certain questions about an order since you are trying to protect the honest customers from the unscrupulous. Making contact with the buyer in advance of shippping should always be understood by legitimate folks that know you're trying to protect your business.

7. When in doubt, call the company. If you ever don't feel right about a transaction, most payment processors will be happy to discuss the matter with you during the moment. It is better to explain to the customer that you will get back with him personally than to rush the transaction and then to have to try to reverse the charges later.

8. Make your anti-fraud policy visible at your web site. If you are up-front and straightforward about how you deal with fraud issues, you are less likely to actually have them. Put notices on the ordering and check-out pages so that all can see that you are watching for fraud and that you will not tolerate it in your ordering system.

In actuality, a strong anti-fraud stance will increase your business rather than decrease it because your customers will understand you are watching out for their best interests and you are protecting personal information.

9. Use special anti-fraud services. There are any number of Internet companies that can be found online that specialize in screening customers for potential abuses. I would suspect that these services would best be employed by businesses that ship physical goods as opposed to those that deal only in digital downloads.

Fraud is difficult to detect at times. It is also difficult to deal with when the offender is stationed in a country overseas. But a little forethought and some basic precautions taken can help you to minimize the loss of income and inventory in your business.

Thank you Michael Bloch.