What is Fraud? How to Check Fraud?

Fraud, which is the reason why many consumers are distant from online shopping, refers to the use of malicious methods such as copying and stealing credit card information. Fraud, which literally means “forgery” or “fraud“, leads to loss of money and reputation. When the losses are analyzed, it is understood that fraud causes losses not only to the cardholder but also to the e-commerce site.

What is Fraud Control?

Fraud control is the measures taken to prevent or minimize the risk of fraudulent transactions that result in the loss of the cardholder and the e-commerce site. Fraud control includes the measures that e-commerce sites should take and the controls carried out to detect suspicious transactions at the time of the order. By following fraud checkpoints, businesses can detect suspicious transactions and prevent their customers from experiencing financial loss. It is also important to remember that fraud control protects the reputation of the e-commerce site as well as the customer.

How to Check for Fraud?

E-Commerce sites resort to fraud control to reduce the risk of fraud. Simple measures and detection of fraudulent attempts are the basis of fraud control. By utilizing the methods available for fraud control, virtual businesses can follow effective strategies to deal with fraud. Below are some of the things that can be done for fraud control:

Using the 3D Secure System

3D Secure payment system is the most basic fraud prevention method known. The 3D Secure payment system aims to create a secure payment platform by providing data flow between the customer, bank and merchant with end-to-end encryption. While the payments made are approved in secure environments determined by the bank, a smart notification is sent to the cardholder’s mobile phone via SMS or mobile application for approval. This method, which provides an additional security measure to complete the payment, prevents the use of counterfeit cards .

Security Code (CVV/CVC2) Check

Fraudulent transactions are most common when shopping online. This shows that fraudsters do not need to physically possess the credit card to spend. To take precautions against this, e-commerce sites can prevent payment without physical access to the card by requiring CVV/CVC2 control in payment verifications.

First Shopping Check

Investigations on fraud victims show that fraudsters prefer to shop in new channels with the card information they have obtained. E-Commerce sites can catch important clues in fraud detection by checking the first orders of new members in detail.

Basket Average Limit Check

The fact that the credit card can be canceled in a short time after the fraud is discovered means that fraudsters don’t have much time to spend. For this reason, fraudsters often try to maximize the benefit by making large purchases. E-Commerce sites can eliminate the risk of this option by checking the average basket amount of their customers.

Detection of Incorrectly Entered Card Information

One of the most common behaviors in fraudulent transactions is the multiple incorrect entry of card information. Card information that is suspiciously entered incorrectly more than once should be detected by e-commerce sites and considered as evidence of fraud.

Detection of Shopping from Different Memberships with the Same Card

In the fraud check, fraudsters know that the average basket amount is checked. For this reason, they may prefer to shop through different accounts to get around the back door. Purchases made from different accounts with the same card should be scrutinized by e-commerce sites.

IP Control

In case of suspected fraud, e-commerce sites should check the ordering IP number. Using different cards from a single IP address is a behavior that increases the risk of fraud. In such cases, it is necessary to check by requesting information from the bank.

Different Delivery and Billing Addresses

E-Commerce sites can detect suspicious transactions by focusing on cases where the delivery and billing addresses are different in fraud control. If the billing address that the customer usually uses remains constant, situations where the delivery address changes should be checked in detail.

Identity Check on Delivery

E-commerce sites can request an ID to determine whether the person who placed the order and the person who received it are the same by agreeing with the cargo companies. This control process, which is carried out in agreement with the cargo company, ensures effective results in fraud prevention.

How to Fix Fraud Error?

Fraud error is a situation where users enter incorrect card information in a row or unconsciously do things that are considered in other fraud checks. When cardholders are caught on the fraud check radar, they cannot shop from the e-commerce site or their cards are canceled by the bank. In the first option, after waiting for a while, shopping can be completed by entering the card information correctly. In the second case, it is necessary to contact the bank and request the card to be opened.

What Does Fraudulent Transaction Mean?

Fraudulent transaction is the term used for purchases not made by the cardholder and made by copying credit card information with malicious software or other methods. For a fraudulent transaction, the card information must be obtained without the consent or knowledge of the cardholder and the expenditure must be made without the consent of the cardholder.

What Does a Fraud Analyst Do?

Fraud analysts or specialists are professionals who ensure the implementation of fraud prevention programs. The task of a fraud analyst is to detect and investigate fraud. Fraud analysts use their equipment and experience to develop methods to deal with all types of fraud and dishonesty. The duties of a fraud analyst can be listed as follows:

1. Taking initiatives to prevent potential losses by quickly identifying fraud tactics,
2. Obtaining information to prove or disprove allegations of financial irregularities,
3. Prepare a secure environment by improving security policies and Fraud controls,
4. Protecting the confidentiality of company information and customers,
5. Identify suspicious transactions and suspicious consumer behavior.

Importance of Fraud Detection in E-Commerce Sites

The loss of e-commerce sites in fraudulent transactions can be much more than cardholders. In addition to losing reputation due to fraudulent transactions, e-commerce sites may face various sanctions in cases where a violation is found. For sanctions, fraud volume is calculated and the fraud ratio obtained by dividing the total fraud transaction amount by the total turnover is used in the calculation.

Fraud ratio can be considered as 4 per ten thousand for workplaces. If this ratio, which may vary on a sector basis, is high, actions can be taken against banks and e-commerce sites. Trust is everything in e-commerce and sites should take the necessary security measures at the point of fraud control and protect their reputation by working with professionals.

Virtual POS and Fraud Solution

Businesses to receive card payments in e-commerce virtual POS use them. Virtual POS can be considered as a digitalized version of physical POS devices. After entering the information of the debit or credit card, the payment transaction is completed through virtual POSs.

When it is remembered that fraud is committed by stealing card information, it is seen that virtual POS providers have a great job to prevent these transactions. Virtual POS providers should fulfill their obligations to combat fraud and relieve their customers’ hands.

Virtual POS service providers, PCI DSS compatible technical infrastructure to ensure store and payment security. In addition, virtual POS providers must observe security criteria in order to give e-commerce sites a passing grade. In short, e-commerce sites that can provide virtual POS should be considered reliable.

Since 2009, PayTR, which has been supporting stores that want to receive virtual POS service, successfully ensures the security of websites and store customers with its strong staff with more than 12 years of experience in security. It provides the necessary secure payment environment with the measures it takes against counterfeiting. In addition to PCI DSS compliance, it does not allow suspicious transactions with filters developed on a sector basis to prevent fraud, SSL certified pages and 3D Secure support. Suspicious situations are caught in PayTR security filters and if no suspicious situation is encountered in the monitored transactions, the transaction is not approved.

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