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Credit Card Fraud Detection Techniques

Credit card fraud is a dangerous issue that continues to give online merchants serious headaches. Fraudsters keep coming up with new techniques every day to rob buyers and sellers. Online sellers are, therefore, finding it hard to detect and control fraud. A whopping 47 percent of the sellers think that credit card fraud is inevitable, while 20 percent think the cost of controlling it is too high.

While these are all facts, you can’t just sit and watch as fraudsters take over your business. Apart from the costs of controlling fraud being too high, the method you used yesterday might not work today. You need to use the following strategies that can help in your credit card fraud detection journey.

Detect Suspicious Activities

As an online seller, you must open your eyes wide to try and detect any suspicious buying activities. Watch out for suspicious customers, suspicious credit cards, or abnormal transactions. All these are red flags to tell you that something might be seriously wrong. For instance, if a new customer makes multiple orders repeatedly in a short time, this can be a red flag.

While some might be mere suspicions and no credit card theft, it is better to decline than feel sorry later. The right thing to do is always follow your instincts and avoid such risks.

Properly Examine Order Details

An important credit card fraud detection technique involves examining the order keenly. Do the details match? Are the characters in the credit card consistent? Is the transaction value above average? These are all the questions you need answers if you’re keen on your buyers.

You also need to check the kind of products that the buyer is ordering. Some products, such as jewelry, computer equipment, cameras, and shoes, are prone to shoplifting. If, for instance, a seller purchases more than two gold rings or the same quality, you should pay attention because this can turn out to be a big fraud.

Check the Location

While buyers might travel a lot and make purchases from different places, some location changes are just too suspicious.  Sellers can use various tools to track the location of their customers at the time when they are making a purchase. They will, of course, indicate their location in the billing information. What if the tracking tool tells you they are located somewhere else?

Location disparities might not be enough reason to conclude that a customer is a fraudster. However, if this combines with other suspicious activities such as inconsistent credit card details, you might think of canceling the transaction before experiencing the biggest fraud of your life.

Transaction at Odd Hours

Fraudsters are likely to shop at the time when they think no one is watching. You might be selling 24 hours, allowing customers to buy anytime they wish. However, certain purchase hours can raise suspicions.  If you suspect that the hours can’t be right, you can check the buyer history, the amount of purchase as well as other factors that can help you in your credit card fraud detection effort.

In 2018 alone, a report estimates credit card losses to have amounted to $27 billion in America. This number can be less this year if different online merchants adopt these strategies of detecting credit card frauds. Staying proactive will prevent unnecessary losses.

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Susan Paige

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