Keeping One Eye Open: These 8 Red Flags Will Help You Spot Fraudulent Transactions

While e-commerce has greatly grown within recent years, the threat of fraudulent transactions is also unfortunately higher. In fact, according to the Association for Financial Professionals (AFP), a survey of 700 finance and treasury professionals found that a whopping 78 percent of organizations received at least one fraudulent transaction.

As one can imagine, fraudulent transactions can cause immense losses for business big and small. Although you can never be so safe, there are fortunately ways you as the merchant can spot fraudulent transactions before they occur:

1. Faster shipping requested for high-value items

Especially when purchasing valuable items, fraudsters will want the items as quickly as possible. That said, they may pay for the fastest method of shipping. This ensures that the products ship out and get in their hands before the cardholder even realizes there’s a suspicious transaction on their card and has it removed.

2. Abnormally large orders

While it’s possible a large order is genuine, sometimes this is may be a result of a fraudulent transaction. From a fraudster’s perspective, they’ll want to purchase as much as they possibly can within a short period of time they may have.

3. Several small orders

As an alternative to placing a suspiciously large order, fraudsters might instead place several smaller orders. However, some credit cards will automatically shut off if there are several items purchased within a slim time frame. Of course, not all cards have this level of security.

4. Orders placed to different addresses from the same card

Because it looks suspicious to place a very large order or multiple small orders, fraudsters might think they’ll get away with their fraudulent act if they send orders to various addresses. Be wary of this.

5. Delivery to an office building or P.O. box

To avoid having their personal address on file, thus making if harder to track down them down, fraudsters might have their order delivered to an office or P.O. box instead. Especially if they are placing a large order, having their items sent to an office building might initially look less suspicious as it might merely seem like they would resell the items to the public legally.

6. In-store pickup

There are two reasons a scammer might opt for in-store pickup after placing an order: 1) to get the items they purchased before the cardholder cancels the transaction, and 2) to ensure there isn’t an address tied to their purchase.

7. Mismatched billing and shipping addresses

If a customer’s billing and shipping addresses don’t match up, this is one sign that the transaction is suspicious. Additionally, multiple orders to multiple addresses may share the same billing address or incorrect zip codes.

8. Inability to confirm customer information

If you cannot confirm a customer’s information, or they intentionally fail to provide it, you might also have a fraudster on your hands. Non-scammers should have no problem sharing general shipping and payment information.

While businesses can’t truly eliminate the risks of potentially fraudulent transactions, they can still do everything in their power to avoid such. Fortunately, Netverify offers a total solution to know and trust your customers.

Conclusion

Although at times, fraudulent transactions can be inevitable, one of the best things you can do as a merchant is keeping your eyes peeled for any suspicious orders. By spotting and reporting fraud, you can save your business, and potentially others’ businesses, from dealing with heavy financial losses.

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