Visa and MasterCard have made important changes to merchant acceptance as part of a proposed settlement for merchants located in the U.S. and U.S. territories. For more information click here.

Non Face-to-Face Transaction Fraud

As more and more business is transacted via the internet or over the phone, there is a greater opportunity for fraudsters to use this remote marketplace to impersonate real customers or use illegitimate cards or checks to rip off businesses. Here are some examples of potentially fraudulent transactions to watch out for at your business.

  • Relay calls - A relay call is an operator-assisted telephone call, typically used by someone who is hearing impaired. While this is a valid service, criminals have also used the service to place fraudulent orders. We recommend you request a "Code 10" authorization request for all orders obtained via relay call.
  • Bulk orders - Customers ordering large quantities of the identical or similar items. You should also be cautious of large bulk orders with a delivery address of an apartment or self-storage unit.
  • Multiple cards - Customers who provide multiple card numbers for the same purchase, especially when the card numbers are different by only the last few numbers.
  • Money is no object - Requests for overnight delivery, without regard to cost.
  • Immediate shipment - Customers who request immediate processing of the order and want the shipment's tracking number ASAP.
  • Immediate pick up - Customers who place phone orders, request immediate processing of the order, and then advise they will have someone come to the store to pick up the product.
  • Alternate delivery address - Requests for delivery to an address other than the billing address, or delivery to a freight forwarder. (Criminals will use United States based re-shippers to avoid detection of foreign shipments.)
  • Not sold here - Telephone or online requests for merchandise you do not sell. Most common requests are for cell phones and laptop computers.
  • Free email orders - Communication via a free email service (Yahoo, Hotmail, Gmail, etc).
  • Excess funds request - A customer may request that you process a transaction for an amount greater than the purchase price of the goods or services and then send the excess funds by wire transfer, money order or Western Union® to a freight forwarding company or other person. Not only is there a high probability of fraud for such a transaction, there is little chance for your business to recoup funds. This type of transaction is a violation of regulations, so you would not have the ability to favorably resolve a chargeback should it occur.
  • Counterfeit check scheme - The fraudster overpays for goods or services with a counterfeit check and requests you to wire transfer the difference back to them or an accomplice. This scheme has been reported on personal checks, business checks, cashier's checks and money orders. It results in a loss of both the merchandise and the cash overage.
  • Fraudulent customer ID - With today's technology it is possible to alter a photocopy of a credit card or personal identification such as a driver's license or passport. Sometimes a fraud order will include a faxed or e-mailed photocopy of the card to gain your trust. These photocopies do not guarantee that you are dealing with the correct cardholder. Always verify the order information with the authorization center before proceeding with the order.

Hot Spots for Fraud

Fraud is no longer localized. Businesses across the globe can be subject to schemes that originate far from their locales. Current hot spots where mail order, telephone order, and Internet fraud are likely to originate include:

  • West Africa - Nigeria, Ghana, Gambia
  • Asia - Indonesia, Singapore
  • Eastern Europe - Bulgaria, Romania, Russia