TEA Blog


Now, more than ever e-merchants must reassess and review their risk management and loss control procedures. With internet fraud on the rise again, according to Krolls Global Fraud Report 69% of Canadian companies were affected at least by one fraud in 2012 / 2013 businesses are particularly at risk.

Typically, credit card fraud can result in thousands of dollars in losses but, thats not all. Fraud also puts your merchant account contract at risk and can damage your business reputation.

As fraud attacks are rampant and causing huge losses to merchants, lets review together how to spot potential fraud and what you can do to safeguard your business.


Most of the online sales are Card Not Present transactions; this means that the e-merchant is confronted with a particularly difficult challenge when it comes to verifying and validating credit cards, as the card is not physically presented to the e-merchant for inspection.

So, how can you spot Card Not Present Fraud?
Here are some of the characteristics or unusual purchasing patterns that you should be on the lookout for:

1.Larger than usual purchases

2.Multiple purchases of the same expensive item

3.Buying the most expensive model

4.Many large purchases in rapid succession

5.Multiple cards used from a single IP address

6.Placing an order using a free email service

7.In addition, pay attention to special shipping requests:

- Express or overnight delivery
- Shipping to a single address but using multiple credit cards
- Many purchases, using one and shipping to multiple addresses


1. First and foremost, make sure that your online store is protected, to prevent potential attacks; that all account information is securely stored and that you work with PCI-compliant processors. Attacking computer systems and databases is the most common method for information theft.

2. As a minimum requirement, online stores accepting credit cards should request customers to enter the security code, called the CVC or CSC or CVV2 usually found at the back of the card. As this type of information is more difficult for cybercriminals to obtain.

3. Ask your Bank/Payment Processor to provide address verification services; checking whether the billing address and the delivery address match. Although, this is not always a sign of fraud, be wary if the addresses dont match and the card holder requires express delivery.

4. Implement a 3D secure protocol, which requires the customer to create a private code, when paying online. Again, this is something your Credit Card Processor can advise you on.

5. Compare the IP location with the billing address to make sure theyre in the same country.

6. For international customers, obtain an updated list of high-risk fraud countries; you can block the country IP or use geo-location technologies that can help you evaluate which transactions are valid and which are potentially fraudulent.

7. Especially, for expensive items, use a carrier that requires ID and a POD (proof of delivery).

The above list is by no means exhaustive!

If you suspect that a transaction might be fraudulent, it seems obvious but, refrain from shipping your goods without further verification. Check that the billing and the ship-to address match and contact the card holder, if possible.

If necessary, escalate accordingly by following your Processor loss control procedure.

The module includes advanced fraud protection tools, such as:

- Security code / CVV2
- 3D Secure: Verified by Visa and MasterCard Secure Code (optional)
- Fraud prevention module.

The fraud prevention module helps you limit and block risky payments by applying specific filters that can be configured, according to business needs.

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