Andy Green's Blog

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How to Reduce Fraudulent Transactions

Electronic commerce, or e-commerce, is one of the largest and fastest growing types of business today. Millions of people buy and sell products and services over the Internet. As with any type of system involving transactions of money, there are pitfalls and scammers that are just waiting for a chance to get away with theft. In order to have a productive and workable business over the Internet, you are going to have to make sure that the right steps are being taken to protect yourself.

The first step to helping reduce the chance of fraudulent transactions is to verify the customer. This means getting enough information so that you know you are going to receive payment. Some of the things that you need to be sure of is what the potential customer’s real name is, a home address to where the product is being shipped, the IP address of their computer, and a valid email address.

Though some customers may find it invasive, these types of questions need to be answered in order to protect yourself. One special part to be aware of is the email address. Free email addresses can be set up with almost no credible information needed, so being able to use it to trace a customer can be pointless. It is a better idea to deal with customers who have specified domains for their emails.

Another reason to get into so much detail is that you will be able to compare the country that the IP address is found in to where the customer says they are located at. This will be able to lend credibility to the customer if this information matches. Also, there are some countries that are actually known to have more problems with scammers and frauds. By getting a list of these countries, you will know when to require more information.

One more point to remember when looking at the customer’s address is whether it is a PO, or Post Office box or a publicly rented mailbox. Both of these can make it virtually untraceable when trying to run down customers who have committed a fraudulent transaction. Do keep in mind that when shipping a product to a company or business that they may indeed work with a PO box, but that it is verifiable that it is actually theirs used for company business.

The basic rule of thumb is if you are just not sure about the transaction, then cancel it. If there is any question about false credit card information, then do not mail the product. When a person sends a check, be sure that it clears for payment before sending the product. Another reason why it would be important to have payment in hand first is to make sure that the cost for shipping and handling is paid. Since the person who is ordering is responsible for the charges, it makes sense that you would need that payment before sending the merchandise.


November 14, 2008 - Posted by | Online Security | , ,

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