Get What’s Coming to You

Maintain an in-house negative file. While third-party negative databases are useful in preventing fraudulent transactions, you should have your own negative database of cardholder information. Keeping a customized list helps you to be doubly sure you’re authenticating the transaction to the best of your ability.

Beware of rush orders. For some customers, next-day delivery is a value-added service. For fraudsters, however, it’s an easy way to get the goods before the transaction has been settled. Teach contact center employees to carefully scrutinize rush orders requested by new customers. Likewise, beware if a customer is indifferent to color, size, model, etc., of the product being ordered. The customers who say, “Just send it to me, I don’t care what it looks like,” can spell trouble.

Watch out for high ticket/high quantity orders. If your average ticket size is $50, then a $600 order may indicate something is amiss. Likewise, if you sell statues, and generally customers order one or two at a time, then beware the 50-count order.

Perform velocity checks. With reporting tools, you can monitor the amount of same card numbers or same bill to/ship to address transactions that filter through your system. Three or four in a row could be a red flag.

Perform e-mail address checks. Requiring e-mail addresses for order confirmation also can determine the order’s legitimacy.

Tools to Fight External Fraud

As noted earlier, external fraud can take many forms. Identity theft alone has reached an alarming growth rate of 25 percent each year. More sophisticated scammers, like card generators, hackers and skimmers, are no longer an anomaly.

Yet 75 percent of all disputed transactions are due to one reason: The customer wasn’t authenticated at the point of sale. As a cataloger, you have the right to set parameters for each transaction that’s initiated, both via phone and Internet. Now more than ever, authentication methods are mandatory. They include the following: