Merchant Education: Listening For Fraud


A Guest Blog by Jim Luff at Chosen Payments

One of the first tips that you are taking

a fraudulent order is usually found in GREED.  There are many clues that fraudsters will give out during a fraudulent transaction.  The key to detecting them is to really listen to what they are saying.

If a person places an order with you and seems to be in a rush to get off the phone or get the product/service, this can be a clue.  If they place an initial order with success and call back within a short period of time to order additional products or services, red flags should be popping up all around you.  This is a good indication they are adding on product or service simply because the card went through.

Does the caller sound youthful?  Is the purchase amount within the youthfulness of their voice?  Is the caller asking about prices or the cost of shipping or just purchasing indiscriminately with no regard for pricing.  Is the caller asking for anything out of the ordinary, such as paying another merchant on their behalf?  All of these are red flags.

Many times, you simply get a bad feeling about a customer.  This is called, JDFR or Just Doesn't Feel Right.  Take your time.  You have the upper hand until you have fulfilled the order.  Make sure you ask for their name, the billing address on the card and a phone number.  If you think you are being scammed, ask the caller if you can call them back.  This gives you enough time to call the Merchant Authorization Center (800-228-1122) with a Code 10.  The phone number the customer provided might be a good resource in locating the fraudster during a subsequent fraud investigation.

If you suspect the order is fraudulent, call the Voice Authorization Center and indicate you have a Code 10 sale in progress.  This lets the operator know you are suspicious.  The operator will call the issuing bank who will attempt to call the cardholder and verify the transaction.  If the customer is in front of you rather than on the phone, the operator will only ask you yes or no answers and you will not be put on the spot.

Here are some easy tips to remember.  Share these with your employees:

  • Customer appears to be rushed
  • Customer lacks concern about pricing
  • Customer makes unusual requests to pay others using these funds
  • Customer fails to return a signed confirmation when requested
  • Customer is overly friendly or engaging to distract you
  • Customer repeatedly calls back to add on to the order
  • Customer tells you he has been having problems with the card
  • Customer looks at credit card signature before signing documents

Posted on Jan 10 2017

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