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What do Visa and MasterCard Require you do to prevent fraud? What should you do to prevent fraud? Answers can be found here.
Fraud Prevention Guidelines for CNP Transactions (Card Not Present) Visa Card Acceptance and Chargeback Management Guidelines Section 3 Pages 45 - 50 Good Ideas to Reduce Fraud Credit Card Acceptance Policy Use Address Verification System (AVS) on all incoming transactions, shipment of product should only be sent to an address that has been verified and associated with the credit card that generated the transactions. Require signature on all product deliveries Use Card Identification Number (CID and CVV2) on all incoming transactions. On the majority of Visa credit cards is a 3-digit security code that acts as an additional verification measure and provides some assurance that the cardholder is in possession of the credit card Credit Card Descriptor – clearly convey your merchant name, location, and customer service telephone number, in order to clearly identify your transaction on your customer’s statement Use Soft Descriptors – for online merchants soft descriptors can be used as an extension of the credit card descriptor to identify individual transactions Credit Card Authorization – to avoid technical chargebacks be sure to settle all transactions in a timely manner and do not settle transactions with invalid authorization numbers Refund Policy Provide a clear explanation of all policies with regard to refund, return, or customer service related issues on all invoices, promotional materials, and websites. Post customer policies in a conspicuous and accessible place Increase the timeframe in which a customer can request a refund Create a open line of communication for your customer to contact in case there are customer service issues via telephone or email Restocking Policy – implementation of a Restocking fee may cause partial or full chargebacks Recurring Transaction Maintenance Fraud Monitoring Create a Negative Database of all customers that issued a chargeback for the purpose of denying future transactions and website access in the future Create a dedicated team of employees to review daily transactions for the purpose of identifying blatantly fraudulent activity and support customers service issues that may cause future cardholder disputes Create a rule-based report that identifies high-risk transactions characteristics (i.e. foreign transactions, multiple transactions one cardholder’s card, etc.) Employ & Implement a Risk Management Software that could help you identify high-risk transactions (Example: CyberSource, Retail Decisions, ClearCommerce, etc.) Website Warnings – clear state your policy with regard to credit card fraud on your billing page and report all fraudulent incidents to the proper authorities Bank Identification Number (BIN) Blocking – Block the acceptance of credit numbers related to high-risk areas (West Africa, Eastern Block Nations, Pacific Rim Nations, etc.) Internet Protocol (IP) Blocking – Block transactions generated from IP’s originating for high-risk areas (West Africa, Eastern Block Nations, Pacific Rim Nations, etc.) Online Resources Card Acceptance and Chargeback Management Guidelines http://merchants.visa.com/ds/pdfs/Card_Acceptance_and_Chargeback_Guidelines.pdf Rules for Merchants http://www.mastercard.com/us/wce/PDF/12999_MERC-Entire_Manual.pdf Fraud Prevention Tips found on Visa’s Website http://usa.visa.com/merchants/risk_management/fraud_control_basics.html Fraud Prevention Tips found on MC’s Website http://www.mastercard.com/us/securityandbasics/fraudprevention/index.html
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