Fraud Screening Techniques For Merchants and Consumers
Credit card fraud is a very common occurrence in this day and age and costs providers an estimated billion dollars each year. People subject to this kind of fraud end up with poor credit and are caught up in a never ending battle of repairing their credit. All in all, credit fraud makes a victim out of everybody and causes everyone to lose, except the perpetrator of the crime. According to contractual agreements between the consumer and the card provider, the consumer is potentially liable for misuse of their credit card. This, of course depends on the circumstances behind the fraudulent use of the card in question. A consumer also has to face the headaches involved in obtaining a new card and updating all records associated with the stolen one. The retailer or merchant that accepted the card in the first place also suffers losses. Merchants have to deal with the fact of losing their product or service that was provided for the fraudulent funds. This can add up to extreme costs for the merchant and extend to the point of a merchant going out of business. Merchants have to rely on their insurance, if they have any and with each claim they file risk losing their insurance or a rise in their premiums. There are companies that specialize in fraud Financial Services specifically aimed at protecting merchants from chargebacks associated with fraudulent use of a card. Last but certainly not least, the card issuer loses. Card issuers lose a lot of money, however one must realize that the consumer and merchants will eventually suffer as the card providers are forced to raise costs associated with their losses. With this information, one can see why it is imperative to take appropriate steps in trying to prevent credit card fraud.
If you are a consumer, it is best to always know where your card is, and report it missing as soon as possible. It is also wise to not use your card to take out a cash advance from an ATM. When shopping online never enter your card number and details into an unsecure website. If you are a merchant, preventing fraud and learning proper fraud screening techniques should be one of your top priorities. As a merchant, when a consumer makes a purchase, always check their state-issued driver’s license or government issued ID card. Make sure everything checks out such as age, height weight and look at the consumer to see if they match the description on their card. Also, make sure the card is not a fake. Many states have fraud prevention measures implemented into their identification cards.
The above tips can help save the industry billions of dollars per year in losses; however they are far from foolproof. Merchants should focus on methods in proper fraud screening and exercising caution when accepting cards for payment. This in turn will help prevent chargebacks to the merchant. Consumers should take proper steps in protecting their credit card information and reporting losses as soon as they can. With credit card fraud on the rise and costing everybody more each year, it is important to know how to take the necessary steps to stop credit card fraud before it gets out of control.