The World of Webhosting

When businesses first started performing transactions online, media headlines raged about consumer safety and protecting their credit card numbers from being stolen. But with prevention measures in place to protect consumers, merchants are looking to protect themselves against Internet fraud.

One of the simplest ways to prevent fraud is to address the matter on your Web site. By placing fraud notices, buttons and images on your site and order forms, you can deter some potential online scammers simply out of fear. Explain that violators will be pursued to the fullest extent of the law and that they can be tracked by their IP and email addresses.

Second, carefully review your orders. Make sure the consumer filled out all the information correctly and that it matches the information that the card-issuing bank has on file. This isn’t always the best judge of a fraudulent order as sometimes the billing address will differ from the shipping address if your product is being sent as a gift. But use extra precaution when the information doesn’t match up. One way to clear up any confusion is by actually calling or emailing your customer before you process the order.

You should also be cautious when dealing with orders from outside the US, especially if you’re a small to medium-sized business operating in the US; you are prohibited from doing business with countries that are subject to US Embargo. Reports show that a majority of fraudulent orders originate from countries in Asia, Africa and the Middle East. More detailed lists are available from resources like the American Registry for Internet Numbers (arin.net) or Asia Pacific Network Information Centre (apnic.org). Experts say that many fraudsters also use free email addresses because they make it easier to hide an identity. Take the time to check online databases that list all the different free email providers. A good source is EmailAddresses.com (emailaddresses.com).

Using fraud prevention software provides a more automated way to protect your orders from fraud.

VariLogiX (varilogix.com) offers a product called FraudCall, an automated telephone service that verifies product orders. The tool places out-bound telephone calls to customers to verify their orders while they are still on a merchants’ Web site placing the order, so there is no delay with verification. A basic account starts at $9.99 a month.

Another option is Fraudguardian (fraudguardian.com), which lets you integrate real-time fraud scoring into your own order form or e-commerce software. With each fraud score calculated by FraudGuardian, the score and location is saved for statistical purposes. These enable the software provider to show “fraud hot spots” or “fraud clusters” by domain and by country. The company says it can help protect businesses from charge backs by using the fraud score to weed out fraudulent orders before they come back to hurt the bottom line. Customers can choose from eight packages starting at $5.95 a month.

Keep in mind that using more than one precautionary measure will increase your chances of protecting yourself from e-commerce fraud. And you should constantly update your prevention processes to keep your business as safe as possible.