Safe and Sound: Utilize the Power of These 5 Tools to Help You Detect Online Fraud

In the world of online business, we have more exposure to fraud than an offline business world. In person, you can see what a person looks like, you can ask for identification, and you physically see the cash or card being used to make a purchase.

With an online business, you don’t usually get these things. Instead, you are sent details over a computer, with no face attached, and are asked to trust that these are correct. When they aren’t, money can be lost. Your transactions might be covered by insurance, but you can still lose out on costs such as shipping or fee’s to your payment processors. On top of that, you can even lose a merchant account if you fall victim to fraud too often. It can become a serious and extreme worry if it carries on, that is why online businesses need to get checked out to see what is going on in their system. Using a business such as Castle can help with fraud detection and see if there are any other malicious problems happening within a business.

With online fraud expected to cost over $7 billion by 2020, this is a serious issue that has to be fixed. Thankfully there are some tools which you can use to help detect and prevent online fraud. To be truly effective, you should combine multiple tools which have different strengths and weaknesses, to create a complete system.

  1. Address Verification

Address verification is a simple tool to use. It checks the address details used in the order against those on file with the bank associated with the account holder. This can sometimes be gamed by using a gift address for the delivery, but that would still require the right address to be used in the order – and the address is tougher to get hold of than a card.

  1. Identity Verification

You can also use a tool which checks the authenticity of any ID used in the purchase. Netverify is useful for this, it works by taking a sharp picture copy of any ID, then checking it against the details of that ID in an identity database. If the details don’t match, the card will be declined.

  1. Check CVV Codes

The CVV code is something which should never be stored, so it’s a piece of information which can only be gotten from the card. By asking for it, you are ensuring the card is present when the order is placed.

  1. Using a Blacklist

A blacklist holds various details which are suspected of use in fraudulent transactions. By checking details against known blacklists, you can auto-decline any suspicious purchases. What’s more, you can even contribute to these lists if you do become a victim of fraud, or even create your own list if needed.

  1. Use Payer Authentication

This refers to programs like ‘Verified by Visa’ and ‘SecureCode’. These systems are external to your process and are run by the card providers themselves. They hold the most data on their cardholders and have a high standard of security. Adding the use of this authentication to your business can eliminate a lot of fraud.

The system works by asking for details which are not listed on the card, and which only the cardholder should know. If the details don’t match, the transaction will be declined. Because this is offered by card providers, it tends to give you a lot of extra protection against fraud.