How to Secure Your Web Site Against Fraud

The Internet makes it easier for companies to compete in the marketplace and provides a convenient, fast way for customers to place their orders. But with every new innovation come those who seek to exploit it. Protect your Web site against fraud by implementing these procedures.

Difficulty: Easy

Instructions

Things You'll Need:

• Anti-fraud statement

1. Post an anti-fraud statement prominently on your Web site. Explain your policies on taking orders and state that you will take legal action against anyone who attempts to place a fraudulent order.

2. Insist that each customer provides a complete address and valid telephone number. Ensure that the customer's billing address matches the information on file with the credit card issuer or bank.

3. Require customers to provide an e-mail address issued by an Internet service provider, not a free e-mail service. Free e-mail services do not require the user to prove his or her identity before issuing an address.

4. Send e-mail verification to the customer after he or she places an order. Require the customer to reply and confirm the order via e-mail. This greatly increases the odds that whoever has access to the e-mail address is the same person who placed the order.

5. Consider subscribing to a service that screens each order by verifying the validity of the credit card, check and customer information.

Tips & Warnings

• Report each incident of suspected fraud to the authorities immediately. Keep thorough records of all orders so that you can assist any potential investigation.
• Provide alternative methods of ordering, such as via telephone or fax, for those legitimate customers that have e-mail addresses with free service providers. At the very least, call the telephone number that the customer provides to verify the order.
• Calling customers to verify orders is a sound business practice even if you don't suspect fraud. A phone call is an opportunity to catch any mistakes the customer might have made while placing the order and to inform the customer of any special sales you have going on.
• Consider shipping goods only to the address on file with the customer's bank or credit card issuer. Ask those who would like to send a gift to a different address to call in with their orders. Send a regular mail confirmation of a gift shipment to the customer's billing address as an additional safeguard.
• Your company's vigilance regarding Internet fraud not only helps consumers, but helps you as well. A customer is usually responsible for only $50 of fraudulent purchases. You'll have to absorb the rest of the charges, and your merchant account provider might cancel your account if you have too many purchases that must be charged back.