Beware of Credit Card Fraud This Season
As the holiday season approaches, I thought it would be an appropriate time to share some thoughts that might help protect you and your business from credit card fraud. Some things have changed over the past couple years with the advent of the EMV chip card, but don’t let your guard down for one second. With every advance in security, the cyber criminals find a new avenue.
How Has EMV Changed Credit Card Security in Retail?
There is no doubt that losses from counterfeit and stolen cards are down significantly in the retail sector. However, I have noticed a couple of things that concern me about EMV:
EMV Significantly Slows Down Processing
In large retail establishments where business is robust during the holidays, it will make those behind the cash registers rush. They might not pay as close attention as they should, thereby potentially creating losses.
Clerks are Less Likely to Verify Transactions
Since it is taking longer to authorize each transaction, the clerks are less likely to verify that a card actually belongs to the card holder. They assume since the chip was read, it is good. Keep in mind, if the card is stolen and not been reported, you will never know (until the chargeback arrives).
How Should You Secure Card-Not-Present Transactions?
My biggest concern is for card-not-present transactions. With the implementation of EMV, mail order/telephone order and e-commerce are experiencing a significantly higher incidence of fraud. If you sell online or over the phone, take the time to know your customer and verify the transaction. A few simple steps will help:
Request CVVII Code for Purchases
Make sure you not only verify the zip code is a match, but get the CVVII code as well. Many of the orders I place over the phone do not require the CVVII code, only the zip.
Check Zip Code Against Address
Many accounts are set up incorrectly so that the “zip code” field only need be filled but not necessarily match the card holder’s address. If the buyer only has the card number and expiration date, they still have an excellent chance of “getting you.”
We recently had a client lose $10,000 because they did not heed our instructions and follow these few simple steps.
If the buyer gets aggravated that you are verifying their identity, it is often because they are not the real card holder. Don’t be intimidated. You would be better to lose the sale rather than ship the merchandise, only to lose it AND the money as our client did.
Be smart, don’t let the cyber criminals outsmart you this holiday season.
Our wish from Merchant Consulting Services is that you have a wonderful, joyous and safe holiday season with your family and loved ones and a prosperous New Year. We will be here to assist you with any of your merchant account questions and needs.
God bless and happy holiday,
John