How To Prevent Fraud In My Online Business

By Author: Hugh Springer
Total Articles: 4762
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Fraud is an unfortunate reality for every business. Business owners cannot afford to be sloppy in regards to fraud protection. Doing this could seriously put a business at risk. With the rapid pace at which technology changes and the creativity of fraudsters, it takes diligence to keep a business safe. No one is immune. There are several things that business owners and managers can do to ensure that their risk of being taken by a fraudulent transaction is minimized. Here are a few tips to help:

Know Possible Risks and How They Could Affect Your Business
The most important thing is to keep your company data and client information secure. This includes inventory and stock listings, supplier details and price lists. It is also vital to maintain client integrity by keeping their information secure. No external consultant can know your business quite as well as you do. Your experience will provide you with a natural instinct as to possible risks in the purchasing process. You may have started your business as an online company or this could be a new area of expansion for you. Regardless of when you started working online, ...
... you will need to be aware of the possible risks. A possible scenario could be that items are purchased on a fraudulent card and delivered before that information becomes available. You will have lost valuable stock and possibly labeled as a business to be weary of dealing with. Both of those things could negatively affect your business.

Choose a Merchant Services Company That Is Proactive About Fraud Protection

An important part of fraud prevention is to have a virtual gateway that is secure. You should also use a merchant service provider that is up-to-date with the latest developments in fraud protection. Any reputable merchant service provider should hold a PCI compliance certificate which is an industry standard for card processing merchants. In addition, your merchant provider should be able to supply you with detailed information on fraud prevention. It is as much in their interest as it is in yours to help you prevent fraud in your business.

Implement Anti-Fraud Policies in Your Business
There are a number of basic and practical measures you can implement to protect your business against fraud. First, limit the number of people within your business that have access to sensitive information. This is as much a matter of trust as it is a matter of security. The fewer people who are accessing the system, the more control you will have over its integrity. There is less risk of people being negligent and leaving systems open to hackers and fraudsters if only one or two people are involved. There are fewer gateways and log-in codes that are open to risk. If the system is compromised at any stage, it is much easier to track the weak point in the system if there are fewer users.

A second way to prevent fraud is to know the average value of transactions and set limits on the system. In that way, the security program automatically prevents excessively large transactions from being processed. Looking at your sales for each month should easily give you this information. For example, you may sell books online and the average cost of a book is $25. Most customers will purchase several books at one time and your average transaction is between $100 and $150. You would then set your limits between $150 and $200 per transaction. Remember, you are basing this on information which shows your sales trends so it should be rare that you get a transaction above that.

A third way is to have additional verification processes in your system. These are measures which are implemented to make sure that the person transacting on the card is the genuine cardholder. This may include requesting additional information from the customer and special verification codes issued by the cardholder's bank.

Keep Current with Fraud Protection
Possibly the best way to ensure that your business is protected against fraud is to constantly update your fraud protection software. This includes running regular anti-virus and anti-spyware updates on your computer systems. Create backups of your data and store them in a secure format off-site. Train your staff on credit card and system integrity, and have regular workshops to refresh their knowledge and keep them up-to-date with new developments in the industry. Read up and attend training provided by merchant service providers and banks on fraud prevention. The more knowledge you have, the better equipped you will be to protect your business against fraud.
About Author:
At Card Processing Pros.com we provide credit card processing and debit card processing, literally setting up hundreds of clients per month to process card payments for storefront, Internet and phone/mail order-based businesses. We also offer services in electronic check and gift card processing. Visit online today.