Suspect Fraud?


We hear all too often that what a merchant thought was a great sale turned out to be fraud. So, take the time to check out that huge order that is being shipped halfway around the world to a customer with whom you’ve never done business. A little bit of extra work may protect you from being the victim of a fraud scheme


What to do if you’re suspicious


Merchants should establish procedures for responding to suspicious transactions. Your sales staff should be familiar with these procedures and receive regular training on them.


Card-Present Merchants


If your sales staff is suspicious of fraud, they should follow the established procedures, which could include asking for identification in accordance with the following rule:


A merchant may request cardholder identification in a face-to-face environment. If the name on the identification does not match the name on the card, the merchant may decide whether to accept the card. If the cardholder does not have or is unwilling to present cardholder identification, the merchant must honor the card.


Mail Order/Telephone Order Merchants (MOTO)


For suspicious MO/TO transactions, you should:


  • Ask the customer for additional information: For example, ask for day and evening phone numbers and call the customer back later. Some merchants ask for the bank name on the front of the card.

  • Separately confirm the order with the customer: Send a note to the customer’s billing address, rather than the shipping address.

  • When requesting additional information to verify orders, telephone order employees should use a conversational tone so as not to arouse customers’ suspicions. If a customer balks or asks why the information is needed, employees should say they are trying to protect cardholders from fraud.


E-commerce merchants


For suspicious transactions, e-commerce merchants should establish effective procedures for cardholder verification calls. Contacting customers directly not only reduces fraud risk, but also builds customer confidence and loyalty. Your verification procedures should address the need both to identify fraud and leave legitimate customers with a positive impression of your company.


  • Use directory assistance or Internet search tools to find a cardholder’s telephone number. Do not use the telephone number given for a suspect transaction.

  • Confirm the transaction, resolve any discrepancies, and let the cardholder know that you are performing this confirmation as a protection against fraud.