Simple Credit Card Fraud Checks

Credit Card Fraud is one of the hardest problems to deal with as an online business, in many cases it comes down to a human check to ensure that the credit-card in valid before accepting it. Using automatic scoring services certainly helps, but doesn’t by any means eliminate the problem (since they can sometimes be horribly inaccurate).

Here are a few additional checks you can do from inside your system:

  • Blacklist card-numbers
    Some people have real plastic fake card and will re-use the number again and again. Blacklisting the number eliminates the need for a human check later down the line.
  • Blacklist email addresses
    If you have an email address verification (you may require a valid email address to distribute your product) you can easily blacklist an email address. It’s not 100% effective because people can get free email addresses, but most of these sorts of fraud transactions are done by hand, and it often takes some time for the person to figure out whats gone wrong.
  • Score based on previous transactions
    If you can identify the user (by name, email, or some other means) you can see how reliable they have been in the past.
  • Address Verification
    There are several services out there that will provide you with the billing address registered with the bank for a card-number. This will also determine whether such a card even exists.
  • Human Verification
    At the end of the day, there is no substitute for calling the person up and talking to them (and maybe getting a photo of the card faxed to you). However, this is costly and should only be done with the most suspect cards.
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