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What Should You Do When You Suspect Someone is Using a Stolen Credit Card at Your Online Business?

If you have an online store, you may have gotten an order that looks suspicious. Here are some steps you should take.

What should online merchants do when they suspect someone is using a stolen credit card? If you have an online store, you may have gotten an order that looks suspicious. Maybe it’s an order for five of the same item that typically people don’t buy that many of, or some other massive order that isn't normal.

Other signs of suspicious online shoppers include:

  • Multiple payment cards have been used by the same IP address within a few days
  • The shopper’s billing address is more than a certain number of miles from the shipping address.
  • The shopper’s email address has been flagged in a database of known fraud activity
  • The bank identification number (BIN) of the card shows that the transaction comes from a country with a high-risk of fraud.

So what do you do if you think a transaction was suspicious? Where do you turn?

Step 1: Call the Phone Number Provided with the Transaction

You call the number provided on the transaction. Many times, that phone number will be the actual cardholder. You can ask them if they just made a purchase and confirm it. Of course, you could be speaking to the thief, as well. If you don’t feel satisfied with the answers, or the cardholder isn’t available to speak to, you’ll want to continue to the next step.

Other times, you’ll call the number and it is a Google Voice number or is disconnected. What do you do then?

Step 2: Request a Code 10 Authorization from Your Credit Card Company

The major credit card companies, American Express, MasterCard, and Visa all suggest about the same thing that you should do if you suspect fraud. You should call your credit card authorization center and speak to an operator. In a normal voice, request a Code 10 authorization request.

After answering a few yes or no questions, follow the operator's instructions. If there is fraud, the operator will contact the proper authorities. They will also make sure the real cardholder is notified.

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Step 3: Reduce the Cost to Your Business

If the card is actually stolen, unfortunately, this could cost your business a good deal of money. It’s very possible that the actual owner of the credit card will dispute the transaction and the charge will be reversed. This is known as a chargeback.

Fortunately, if you're an online business and deal with products that need to be shipped, you can hold the items until the credit card authorization is actually verified. If you offer services, then you're probably not out much, either.

However, if you have a business that deals in digital products or some other instant delivery that can't be reversed, then you may have to take legal action against the thief. Of course, online, that person could be half way across the world. But the police may still be able to track them down, especially if the thief is within the United States. You could then take them to small claims court to try to get a settlement.

Step 4: Try to Prevent Future Credit Card Fraud

One way to prevent credit card fraud in the first place is to use online verification services. In a brick-and-mortar business, cashiers can require photo identification be shown before using a card. Online, there are other ways that purchasers can verify their identity. Companies such as Experian offer businesses identity verification services. There are other ways to prove a credit card holder’s identity, and it’s worth looking into the options.

Another way to lower or prevent fraud altogether is to use a good hosting company who will work with you to block traffic from repeat fraud transaction attempts from accessing your website. For example, WPengine is a WordPress hosting platform that works to prevent not only unauthorized login attempts, but also to find and block suspicious users of your site, especially your store.

Credit cards are a great convenient way for people to pay online. But you always have to be careful. The good news is that it’s usually pretty easy to identify a transaction that’s unusual. If you act quickly, you can probably not only save yourself a lot of money, but help out the actual cardholder, as well.

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