How to Protect Your Business From Identity Theft

Second to individuals, small businesses have the potential to be very vulnerable to identity theft scams. Working in the charge back department of a credit card processing company, I personally seen the impact of this problem for small business owners. In this article, I want to share tips that I hope will help you reduce your risk with this issue:

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• A small business
• A credit card processing machine.
• Desire to reduce your risk of being scammed by identity thieves.

1. Read all the materials given to you by your credit card processing company.
   
   If you're not given information on how to reduce your risks of being scammed, call them up and ask them if there's anything available that they can provide you. Being proactive may help you get extra materials that may not get sent out in your welcome packet.
2. Check Identification.
   
   Sometimes you can get so excited over a big sale that the idea of offending someone by asking for ID may come to mind. This mistake can cost you a lot of money and could possibly ruin your business financially later on.
3. For on-line purchases, make sure to get verification through an AVS code of Y or a CVV Match of M (both would be better).
   
   If you're not familiar with these methods of verification, call up your credit card processor and ask them for more information. Most business owners may be given this in an initial packet but may not know that these will at least give evidence that the use of a credit card was not fraud. Also if these don't check out, don't force the sale. You'll have a high chance of getting a charge back down the road.
4. When shipping, use the most accurate form of proof of delivery as you can.
   
   Again, this will help you if you receive a charge back for the item not being delivered or the claim that the purchase was made with stolen information.
5. Be skeptical of large purchases coming from overseas countries where you have no established business ties.
   
   Ask your credit card processor for a list of primary countries where these scams are originating from. Basically you'll receive a request for a very large purchase from your company and to send it to an overseas address. The credit card goes through, and you send the merchandise. Problem is the information was stolen. Not only do you get hit with lost merchandise but you'll likely lose the income from the sale.

Tips & Warnings

• Make sure your employees are trained to check ID as well and that they don't let it slip. Obviously they're going to know regular customers over time, but I'm thinking more along the lines of busy times of the year such as Thanksgiving and Christmas.
• Obviously it's hard to cover every situation that can happen in one article. My best advice is to work with your credit card processor and do your homework when it comes to this issue.
• Another common scam that was used against merchants was the customer calling their "bank" to authorize a purchase after a credit card didn't verify correctly. In reality, they were calling an accomplice. In those situations, ask for the name of the customer's bank, and you personally look up the number in a phone book. Use your phone and not their cell phone.