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by Michelle Ferris on Dec 10, 2014

In 2009, the cost of credit card fraud was 5.22¢ for every dollar. Every year, millions of people fall victim to credit fraud. In the US, there was $11.27 billion in credit card fraud during 2012.

With such staggering numbers, business owners must be prepared to do their part to reduce fraud, protecting themselves and their clients. There are five things that should always be done to prevent this crime:

Get the Right Tools

Fraud-detecting software is your first line of defense. Not only does it flag suspicious transactions, but it prevents wasted time during investigations on legitimate transactions. Such software should be frequently updated to include any new data and risks.

Create a Fraud Team

Create a well-trained team to discover transactions that are out-of-the-ordinary. For smaller businesses, there should be at least one person logging data and changes, and one person cross-checking their work. Every loss should be gone over with a fine-toothed comb to find out how to prevent similar situations in the future.

Track Chargebacks

Immediately match chargebacks to original transactions. This will help uncover fraud as well as service problems, such as incorrect product listings.

Gather Better Data

Not only is gathering better data useful for better marketing, but it this same data is very useful in catching criminals. The more data available, the easier it is to catch a criminal. Think creatively about what data would be useful to your business and to aide in investigations.

Don’t Annoy your Customers

Cardholders are protected from liability in fraudulent charges. This leaves the liability squarely with the business owner, which means that stringent measures should be in place to prevent losses. However, if you make it too difficult for a customer, they will simply take their business elsewhere. Ensure your policy is well-balanced to both protect yourself and keep your customers.

We hope you’re never a victim of credit card fraud, but if you are, you should report it to the Internet Fraud Complaint Center. Your complaint will be forwarded to the appropriate law enforcement authorities.

If you want additional information on this topic you can get more tips from the Federal Trade Commission.

 


© 2016, PLC Insurance. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.

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