The use
of E-commerce in Australia and around the world has risen significantly
as a result of increased consumer confidence in the use of credit
cards. This is mainly because there is protection which limits
the liability of the consumer in the case of fraud.
There
is little or no protection available to the merchant. Whether
it be a charge-back on goods claimed to not have been received, or the
use of stolen credit card numbers, the merchant ends up carrying the
loss as well as bank charges for the disputed transaction.
The major
banks say that online transactions are generally safer than
in-store transactions. Although this is great for businesses
who provide e-commerce facilities, online fraud is also on the
rise.
There is
no 100% fraud proof system available at this time, but there are a number
of steps that merchants can take to minimize risk to
their business.
Possible
warning signs are;
-
Purchases coming from countries or regions with which you don't normally
deal.
- Purchases
of much higher value than normal.
- Customers
who try different credit card numbers.
- International
purchases that demand overnight or express packages.
- The
use of post office boxes as a delivery address.
- The
use of a free email service as the method of contact (such as Hotmail
or Yahoo)
Although
these circumstances do not necessarily suggest fraud, it has been found
that fraudulent transactions are more likely in these instances.
To
minimize risk if you are suspicious of a particular transaction;
- Most,
if not all, credit cards now carry a three or four digit security
number printed either on the back or front of the card. Ask for it.
This may stop people using lists of stolen credit card numbers. The
security numbers are separate from the credit card number.
- Ask
for a phone number. Many western countries now have both white and
yellow pages telephone directories available on line. Try to match
the phone number and name and delivery address against the phone book
listing.
- Do
not accept orders to be sent to a post office box (especially overseas).
- Ask
for another method of payment such as a bank to bank transfer or bank
cheque.
- Don’t
send the goods until payment has been received and cleared.
- If
you have tried to verify the validity of the sale and are still not
satisfied, reject the transaction and advise the purchaser of the
reasons.
- Try
to arrange a delivery method that requires the customers signature.
Note!
It is up to you to determine how much time you are prepared to spend
to verify that a transaction is legitimate, and the amount of risk
that you are willing to accept.
Be
aware that even if a transaction has been authorized and cleared by
your bank, it can still be subject to fraud and charged back months
later.
Finally,
shop around to find out what the difference in policies regarding fraud
and charge-back is between the different banks, as the policies and
charges may vary from bank to bank.
E-Commerce