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HOW TO DETECT AND PREVENT CARD FRAUD IN YOUR BUSINESS

Fraud can happen to any business that accepts card payments, and could have a significant impact on your business. See how you can detect and prevent credit card fraud.

What are the different types of credit card fraud?

There are two types of fraud: 

1. In-store or ‘card present’ fraud 

Be aware if a customer is behaving in a suspicious matter. It may be better to lose a sale than to lose the sale and the proceeds. Make sure you inspect all credit cards to make sure they are genuine, and also make sure a payment is made by the rightful cardholder. This includes taking steps to spot fraudulent cards such as looking at the signature panel, numbers on the card and expiry date to assess legitimacy, as well as taking steps to identify the cardholder.  

2. Online or ‘card not present’ fraud 

Be aware of possible fraudulent activity from with online payments or Mail Order and Telephone Order (MOTO) requests. If you’re suspicious of the purchaser or the transaction, we recommend that you do not ship the goods - even if a transaction has been authorised. And be cautious of overseas transactions.

How can I prevent credit card fraud?

1. Educate your employees 

You’re not the only one who is integral in protecting your business and customers against fraud. Your employees can help to recognise and report suspicious activities.  

Train your employees to: 


2. Understand transaction risks 

Certain transactions may be considered as high or low risk:

  • High risk. First time customers, international customers, manual-keyed transactions or any transactions that a customer may key into the terminal may carry a higher risk.
  • Low risk. Transactions that are tapped or inserted into your EFTPOS machine or online transactions that have been authenticated by Mastercard Identity Check or Visa Secure may carry a lower risk 

Be mindful when you are transactions for goods or services that may be considered to carry higher risk. 


3. Keep your terminal secure 

Here are some tips to ensure your EFTPOS terminal is secure when you are taking payments in-store:  

Do

  • Keep your terminal in a secure location 
  • Ensure your terminal is in working order 
  • Ask for an alternative form of payment if the transaction is declined 
  • Train your employees 

Don’t 

  • Leave your terminal unattended 
  • Manually key a transaction if you have the customer’s card 
  • Allow a customer to enter their card details manually 
  • Process a transaction for a third party or supplier 


4. Be aware of refund fraud 

A common type of fraud involves employees issuing credits (refunds) to their own account. To avoid detection, they may create a large debit transaction on a fraudulent card and an offsetting credit on their own card. In this type of situation, it is likely to take weeks, even months, before the fraud is detected.  

To guard against this type of fraud, we recommend you closely monitor all credits, and check that all credits and corresponding debits relate to the same card number.