AVOIDING OFFSHORE CREDIT CARD FRAUDS
It is a necessity for all merchants to
avoid frauds that happen due to the
usage of credit cards. A business gets
affected to a great extent due to
fraudulent orders. Smaller dealers who
sell big-ticket items will be greatly
affected by just a small amount of
fraudulent orders. They could be
affected to such an extent that it could
also lead to their wipe-out.
With fraudulent orders come chargebacks.
Chargebacks occur when cardholders
dispute a purchase made by a credit
card. When a chargeback occurs, the
banks which issue credit cards initiate
chargebacks against dealers. The sale
frauds are deducted by the banks from
the merchant accounts. In such cases,
the dealers may not even be notified
which leads to the chargeback dispute.
Hence, a merchant has to remember that
the bank which issues credit cards to
the consumers is the initiator of
The vital part in credit card acceptance
is to try and verify the cardholders. In
online transactions, this can be done
using the Address Verification System (AVS).
This service makes an attempt to match
the address on the credit-card statement
of the cardholder to that of the
provided billing address. If a match
occurs, then the merchants can go ahead
with the placed orders. If there is no
match, then it is best to reject such
It is a good idea to avoid orders from
certain hotspot countries. Most of the
fraudulent orders come from such
countries. Another important point to be
considered while accepting orders is to
be very careful while accepting orders
placed from a free e-mail address.
Avoiding orders placed from free e-mail
address may result is loss of orders.
Though this holds true, a merchant must
remember that it is impossible to trace
consumers using free e-mail accounts.
Also, the business lost will be lesser
when compared to the chargebacks
incurred. Hence, taking this risk will
be worth it.
In the case of chargebacks, the merchant
not only loses the price of purchase and
actual inventory, he also faces a
chargeback fee for assessing the
merchant. A merchant with excessive
chargeback could also end up losing
his/her merchant account. This means
that the merchant will be terminated
without a warning and the merchant’s
name will be included in a “Terminated
Merchant File”. This file will be
looked-up by the merchant account
providers before a merchant account is
granted. If a merchant’s name is found
in this list, the providers may not
issue another account for many years.
It is always better to deliver order
through a carries which will require a
signature on delivery. Also, these
copies must be kept by the merchants for
records. If a case if filed, the
merchant will have some proof for his
defence. Also, time must be spared to
post warning messages on order pages.
With this, the fraudulent orders could
be avoided to a great extent. Keeping an
open eye on transactions, making good
judgements and usage of common sense
will go a long way in avoiding credit
one of our helpful account
representatives to assist you in the
high risk merchant account or
offshore merchant account for a
high risk merchant.