Special Report Payment and Collections
Here are a number of indicators that a transaction might be fraudulent.
- The ship-to address either is a P.O. box or a mail receiving service. These may indicate lack of a permanent address.
- Above-average transaction orders or amounts.
- Toll-free telephone numbers given as day or evening phone numbers. Attempt to get a direct line.
- Multiple orders from a single customer in a short period of time.
- "Big ticket" orders. These items have maximum resale value and therefore maximum profit potential for fraudsters.
- Orders containing several of the same item. Criminals usually select the items with the most resale value.
- Orders from free Internet e-mail addresses. There is no billing relationship for free e-mail addresses, and often no verification that a legitimate cardholder has opened the account.
- Orders shipped to an international address. A significant number of fraudulent transactions are shipped to fictitious cardholders outside the United States. Fraud tools can't validate foreign addresses.
- Orders shipped to a single address, but placed on multiple cards. This may indicate stolen cards.
- Multiple transactions on one card over a very short period of time. This could be an attempt to "run" a card until the account is closed.
- Multiple transactions on one card or similar cards with a single billing ad-dress, but multiple shipping addresses. This could represent organized activity.
- Multiple cards used from a single IP address. More than one or two cards could indicate a fraud scheme.
Paul Garcia is vice president of risk management and Karen Markey is vice president of merchant research at First National Merchant Solutions, a payment processor based in Omaha, Neb. They can be reached at (800) 354-3988.