How To Spot Fraudulent Orders
Monday, 07 December 2009 01:00
According to research by CyberSource, fraudulent payments cost US online businesses $3.3 billion in the most recent period, down from $4 billion the year before. This is good news, but great vigilance is still needed as fraudsters become more sophisticated.
The key issue with preventing fraud is not just to identify what is suspicious, but to get a balance between fraud prevention and losing good business. You don’t want to upset genuine customers by slowing or stopping their orders. After all, they will just indignantly tell their friends about their terrible experience, so it’s important to strike the right balance.
What to look out for
There is no simple formula for detecting fraud, but here are some indicators:
- High order value and high value items together with multiple items ordered.
- Orders for well known products in popular sizes or colours.
- Different billing address from delivery address, or delivery address in a public location such as a hotel.
- Special instructions like “call before you deliver”.
- Fastest shipping method chosen irrespective of cost.
- Mobile contact number, free email address e.g. yahoo, hotmail, gmail.
- International orders.
- Shopper has not bought before.
If you are suspicious, contact the shopper and obtain additional proof of identity. If they don’t seem to be familiar with all of the order details, this is a red flag. You can even ask for their first name after telling them their last. Fraudsters frequently use multiple identities, so any confusion or delay can give the game away.
Originally published on the Let’s Talk section of the PayPal website.