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Minimize Internet Fraud

Growth in Internet activity is exploding. Sales levels over the next few years are expected to approach hundreds of billions of dollars.

Underscoring this growth is the ease with which merchants can establish web sites on the Internet. Such ease of access provides merchants with tremendous opportunities to grow their businesses.  Many new Internet Merchants will be small, unsophisticated and trusting entrepreneurs--perfect targets for Internet fraudsters.. Without help in identifying the possible fraud schemes, some new Internet merchants will almost certainly become victims of sophisticated Internet criminals.

We encourage you, our merchants,  to verify an unknown customer that was shipped to a distant international address. Additional cardholder verification could prevent you from being victimized by internet fraud.

Please take a few moments to read the guidelines below.  You need not be concerned when only one of these characteristics is present, but when several of these factors, indicated below, characterize an Internet purchase, you must take care to avoid becoming a victim.

   

Be alert for Internet transactions with several of these characteristics:

  • First Purchases that are also typically the only purchase, that allow fraudsters to minimize possibility of identification.
  • Larger than normal orders that maximize purchases on time-limited stolen or bogus payment card accounts.
  • Orders consisting of multiples of the same item or big-ticket items that maximize resale value and profit potential.
  • Orders shipped rush or overnight to deliver fraudulently obtained items as soon as possible for quick resale.
  • Orders from Internet addresses using free email services that do not require a billing relationship or verification that an account was opened by a legitimate cardholder.
  • Orders shipped to an international address that will typically be a bogus address.

Develop and maintain customer databases to track buying patterns and identify changes in buying behavior such as:

  • Transactions charged to similar account numbers as face account numbers generated by fraud schemes tend to be sequential.
  • Orders shipped to a single address but made on multiple cards to maximize resale value and profit potential.
  • Multiple transactions charged to one card over a very short period of time to maximize usage on an account before it is closed.
  • Multiple transactions on one card or similar cards with a single billing address but multiple shipping addresses that indicates fraudulent activity by an organized, large-scale group.
  • Multiple cards used from a single IP address to maximize purchases and profit potential.

Utilize risk management tools:

  • Use the AVS (address verification service) during authorizations to verify the cardholders identity and billing address.
  • Ask for a Code 10 authorization to alert authorization centers to a suspicious transaction.
  • Require additional customer information to make it more difficult for buyers to hide their real identities.
  • Confirm suspicious orders separately before shipping to minimize merchant risk exposure.

For additional information or further details on Internet fraud, or about Visa's best practices for e-commerce merchants, contact your Visa Account Executive.