Is Your Business Safe from Credit Card Fraud?

credit card fraudCredit card fraud is a major problem these days, especially given how easy it is for scammers and thieves to spoof legitimate websites and emails in an attempt to steal consumer information.

In fact. it’s estimated that U.S. credit card fraud losses may exceed $12 billion by 2020, and that number will likely go up from there.

Of course, as a business owner you have more to worry about from credit card fraud than just someone stealing your credit card number. If the processing system for your credit cards is compromised, the reputation you’ve spent so much time building up for your business will take a major hit. Even multinational corporations are hit hard when a new breach is discovered, so it’s important that you do whatever you can to protect your business and its customers.

Ideally, you should try to prevent both illegal access to your customers’ information and thieves using stolen or spoofed credit cards at your business. Accomplishing this is easier said than done, however.

If you’re worried that you may not be doing enough to fight credit card fraud, here are a few things that you can try:

Upgrade Your Processing

You’ve likely already seen processing equipment that includes a chip reader.

Instead of swiping the card, customers have to insert it into a slot and wait while a metal chip in the card is accessed. Some people think that this is an inconvenience, but it’s totally worth upgrading your system to include chip readers.

Though the technology is just now becoming widespread in the United States, chip readers have been used in Europe for several years. The chip access technology is much more secure than the old swipe method of reading a card, and chipped cards are much harder to duplicate than traditional credit cards. As an added bonus, your business won’t be considered liable for losses if theft does occur through a chip reader.

Beef Up Online Security

A lot of people are shopping online these days, and it’s possible that your company offers online purchases as well.

How secure is your online card processing, though? To protect both your customers and your business, make sure that everything is transmitted through a secure connection and encrypt all order and customer data. This will make it much more difficult for anyone to steal your data, and if they do manage it then they won’t be able to read any of the data they found.

You can also have your webmaster create a script that checks for strange purchases, flagging them for manual review before processing the order. This includes orders that share a shipping address but have different card numbers or customer names associated with them, orders with multiples of items that you generally don’t see multiple purchases of or orders that contain big-ticket items (especially if there are several such items in the order).

These may be legitimate, but a quick double-check to make sure certainly won’t hurt.

Spotting Potential Fraud

There are a few warning signs that you can train your employees to look for that may indicate potential credit card fraud.

Customers who seem overly nervous before paying, or who have their credit card loose in a pocket instead of in a wallet or purse may deserve extra attention. If they are buying multiple expensive items or odd varieties (such as clothing in different sizes, or related items that clearly don’t go together such as an iPhone and an Android charger) then this could be a red flag as well.

Other potential signs include customers who seem rushed, who want you to talk to someone on the phone that they claim is from their bank or who want you to manually process a card because of supposed damage to the magnetic strip.

As with online flagging, it’s possible that all of these instances could be legitimate (with the possible exception of the bank call, as a bank teller wouldn’t ask to speak to your employee). Still, some additional confirmation of legitimacy certainly wouldn’t hurt in these instances.

Train employees to ask to see the card and a photo ID to match signatures; if the names don’t match or the signatures on the ID and the card are obviously different then this could very likely be an attempt at credit card fraud.

Report It Quickly

If you or one of your employees discovers potential credit card fraud, don’t hesitate to report it.

If you have access to the card, tell the customer that your system is experiencing difficulties and you need to initiate manual processing; call the number on the back of the card and discretely explain the situation. They may instruct you to call the police as well. If you don’t have access to the card, call your credit card processor or contact the police.

Quick action is a key part of stopping credit card fraud in its tracks.