Protection against fraudulent transactions

How can I protect myself from fraudulent transactions?

This is what we will help train you on. We recommend the following “basic” fraud protection measures:

  1. Get a signed receipt for all card-present transactions.
  2. Require “CVV” or “CCV” (card code verification) on card-not-present transactions.
  3. Require at least partial AVS (address verification system) “match” on card-not-present transactions.
  4. Review transactions with a different “ship to” and “bill to” address (if you accept a transaction with different billing & shipping addresses, you cannot dispute a chargeback, even if the billing AVS matches).
  5. Review transactions from outside the USA.
  6. Watch for transactions that are “too good to be true”…they often are! If it’s the first time a customer has ordered from you, and wants a very large or expensive order over-nighted ASAP, its worth double-checking by manually confirming the order with the customer.
  7. Review transactions that were preceded by several failed transactions, especially if different credit card numbers were used.
  8. On Card-Not-Present transactions, especially on higher ticket transactions, require a signed authorization form from your customers. We can provide you a draft form to update with your company information to have your customers sign and return.
  9. Monitor the “velocity” of transactions. Signs of fraud are if several transactions are submitted in a row with the same IP address, same email address, same name or billing address, but different card numbers.

Besides these basic fraud protection measures, we also advocate the following:

  1. Verified by Visa & MasterCard 3D Secure (VbV and 3DS). Protect yourself from chargebacks for “fraud” reasons.
  2. Fraud Scrubbing: AVS & CCV alone is not fail-proof. Bolster your confidence and bottom-line by preventing fraudulent orders before they occur.

Fraud Scrubbing

Fraud Scrubbing is a rule-set based fraud management utility that allows merchants to configure extensive filters to help them in detecting fraud and screening suspicious transactions. Our extensive reporting system gives merchants a quick and easy way to review transactions, block suspicious activity, and zero in on malicious users.  It’s a vital part of our merchant account processing services.

This service looks at transactions both before and after processing and can decline transactions before and after authorization. The successful implementation and reduction in chargebacks across numerous merchants has been a testament to the effectiveness of this product.

Some example parameters are included below:

If a user changes credit card over [2] times for [Attempted] transactions, then [Deny Transaction].

If daily [Attempted] transaction count for Credit Card exceeds [3], then [Flag for Review].

If daily [Attempted] transaction count for IP exceeds [4], then [Flag for Review].

Easy-to-Use Management Tools

Our web-based management tools give merchants quick and user-friendly control over their online fraud security system. The control panel allows merchants to maintain their own good and bad customer list, edit filters, restrict access by banning IPs, and set up and maintain filter controls. For example: Possible filtering criteria include but are not limited to IP Address, Email Address, Transaction Count, Dollar Amount, IP Velocity check, Dollar Velocity check, Country, US/Non-US IP Ban, and much more.

Complete Protection

Properly set fraud filters eliminate the majority of fraudulent transactions in real time. The selected filters can be customized for each merchant, which are continuously updated to keep the merchant one step ahead of the fraudsters.

No Cost Pre-application Form!

(Se habla español) Phone: 1+ 224-357-6314

How is Underwriting performed?

Underwriting

Underwriting is performed on every merchant account application. The processor will pull and review your personal credit, and review your business model (and also check the TMF list). The reason for this is that there is a risk involved on every merchant account: every transaction that the bank allows a merchant to process is essentially a 6 month loan to the merchant until the chargeback liability expires.

Since a customer has 6 months to issue a “chargeback” on any credit card transaction, every transaction the bank allows a merchant to process is a “signature loan” or “provisional credit” to the merchant for 6 months. A prospective merchant should realize that a processor offering merchant accounts is doing so as an investment vehicle, and on all investments there are risks. The ultimate risk here is that a merchant will process, for example $20,000/month, for 3 months, and then go out of business, unable to fulfill their services/products promised to their customers. Since customers have 6 months to issue a chargeback for services/products not received, a right granted to them by their credit card issuing bank, the bank can expect to see many of these transactions to come back as chargebacks. While it is true, that most processors require a “personal guaranty” and will attempt to pursue you personally to collect any losses, it is the processor that is ultimately responsible to Visa/MC/AmEx/Discover for repaying these transactions if the merchant is unable to.

True, this is a “worst case” scenario, however, losses are incurred on a more regular schedule, on merchants that experience even less significant chargeback problems. So, this is why underwriting is involved on a merchant account application, to ensure that the processor is not assuming more risk than is warranted.

Denied Merchant Activities

List of Denied Merchant Activities

The following is a list of merchants that are not able to be accepted by any of the processing banks that we work with. This is not an exclusive list. Other businesses may be declined by the processing bank after an underwriting review.

  • CHILD PORNOGRAPHY
  • ANY ILLEGAL PRODUCT/SERVICES
  • REPLICA, COUNTERFEIT or KNOCK-OFF PRODUCTS
  • AGE VERIFICATION
  • CHARITIES THROUGH OUTBOUND TELEMARKETING
  • DRUG PARAPHERNALIA
  • PYRAMID MARKETING/PONZI SCHEMES
  • ANY PRODUCT CONTAINING SYNTHETIC CANNIBINOIDS, “BATH SALTS,” OR OTHER CHEMICALS NOT INTENDED FOR HUMAN CONSUMPTION
  • “HATE” PRODUCTS

Prohibited Countries

List of Prohibited Countries for International Merchant Accounts:

Most processors will not be able to accept merchants from these countries; this list is not guaranteed to be exclusive:

  • Any OFAC sanctioned country
  • Afghanistan
  • Albania
  • Angola
  • Antarctica
  • Balkans
  • Belarus
  • Benin
  • Bosnia
  • Cameroon
  • Central African Republic
  • Cote d’Ivoire
  • Croatia
  • Cuba
  • Ethiopia
  • Georgia
  • Ghana
  • India
  • Indonesia
  • Iran
  • Iraq
  • Kurdistan
  • Lebanon
  • Liberia
  • Libya
  • Macedonia
  • Malaysia
  • Myanmar
  • Nigeria
  • North Korea
  • Pakistan
  • Palestinian Territories
  • Romania
  • Somalia
  • Sudan
  • Sri Lankra
  • Syria
  • Russian Federation
  • Ukraine
  • Venezuela
  • Yugoslavia
  • Zimbabwe