Tuesday, July 13th, 2010 Merchant Security Update
5 Suspicious Card-Present Transaction Characteristics
Customers who attempt to fraudulently use a credit card at the checkout are often betrayed by specific signs of suspicious behavior. Such signs may have a perfectly reasonable explanation that has nothing to do with an unauthorized credit card use, however statistical data show that they are associated with a higher rate of fraud. You should be able to identify such signs and act according to your organization’s established fraud prevention procedures. We have written at length in previous posts about the way these procedures should be designed and recommend that you review our suggestions. Following is a list of five suspicious signs at the point of sale that you should look out for:
Purchasing large quantities of merchandise without much attention to details. This is a very strong fraud indicator! If a customer is purchasing a sizable amount of merchandise, without much care for size, color, or even price, he or she is probably interested much more in its resale value than its utility.
Rushing the cashier into a quicker processing of the payment. Although your customer may really be in a hurry, such behavior may also be intended to force you to circumvent standard fraud prevention procedures. While you would not want to delay a legitimate customer any longer than necessary, you should never forgo regular card acceptance procedures, as this is exactly what the criminal’s goal would be. Explain to your customer that you appreciate the fact that they are short on time, but you are responsible for ensuring that all payments are legitimate and cardholders’ interests are protected.
Making multiple purchases within a short period of time. If a customer completes a purchase, leaves the store and then comes right back in, he or she may be doing it because they believe that making multiple fraudulent transactions for smaller amounts is less suspicious than making a single large-amount purchase.
Shopping either right after the store opens or before it closes. A fraudster may be shopping early in the morning or late in the evening, in the hope that the merchant will not be as attentive as during other stretches of the day.
Ignoring free delivery options (where applicable). If your customer asks no questions or completely ignores a free delivery option, in favor of a quicker but paid one, this could be a warning sign.
Now, it should be reiterated that, although suspicious, a certain behavior might be perfectly well justified and explained in another, completely legitimate way. By themselves, none of the above characteristics constitutes a proof of a fraudulent activity. You should always use your observations of customer behavior in the context of the particular setting. Different businesses attract different types of customers and what is considered a normal customer behavior at one place might be interpreted as completely irregular at another.
Once you have accumulated enough evidence to conclude that a fraudulent activity may be taking place, you should contact your processor’s voice authorization center and make a Code 10 call. You should keep the card in your possession during the call and follow the instructions you are given. If the instruction is to retain the card, you should only do it if it is safe to do so and then ask your customer for an alternative form of payment. If you feel threatened or uncomfortable, complete the transaction and make the call right after the customer leaves.
Wednesday, January 27th, 2010
Card Verification Procedures
Merchants are responsible for ensuring the validity of each payment card that is presented for payment. Visa and MasterCard require that, for all card transactions, except for mail orders, telephone orders, non-face-to-face unique transactions, e-commerce transactions, and pre-authorized orders, the card must be presented to the merchant. If you follow a few simple card acceptance procedures every time a card is presented to you, you will greatly minimize the probability of fraud:
Swipe the card and request transaction authorization. Hold the card through the entire transaction. Do not complete the transaction unless you obtain authorization from the card issuer.
Verify the account number. Most point-of-sale (POS) terminals today allow merchants to verify that the card number that is printed on the face of the card matches the account number that is encoded on the card’s magnetic stripe. The verification procedure varies by terminal type. In some cases, the magnetic stripe number is displayed on the terminal or printed on the sales receipt, while in others the terminal may be programmed to check the numbers electronically. In the latter case, you will be prompted to enter the last four digits of the embossed account number, which will then be compared to the last four digits of the magnetic stripe number. Similarly, if the account number is printed on the receipt, only the last four digits will be visible. If the numbers don’t match, you will receive a “No Match” message. In such instances, you should make a Code 10 call.
Check the card’s expiration date on the face of the card. You should only accept a card that is not expired or you should request an alternative payment method from the customer.
Check the Electronic Warning Bulletin or International Warning Notices. If the account number is listed, do not complete the transaction without obtaining an authorization from the issuer.
Compare the four-digit truncated account number imprinted in the signature panel on the back of the card with the last four digits of the account number on the face of the card. These numbers should match. A non-match is a strong indicator of fraud and the card should not be accepted.
If a photograph of the cardholder is present on the card, compare the photograph on the card with the person presenting the card.
Check that the card is signed. The card is not valid unless it is signed. See below for procedures regarding unsigned cards.
For unique transactions processed in a card-present environment, request personal identification of the cardholder in the form of an unexpired, official government document. Unique transactions include transactions at Cardholder-Activated Terminals (CATs), which are usually unattended terminals that accept credit and debit cards. These terminals are frequently installed at rail stations, gas stations, toll roads, parking garages, and other card locations. However, for unique transactions processed in a card-present setting, such as In-Flight Commerce (IFC) terminals, you should compare the signature on the personal identification with the signature on the card. If the signatures do not match, you should make a Code 10 call.
If u are interested in complete merchant manuals including pos codes from MC, just send me a PM, dont worry, its free
5 Suspicious Card-Present Transaction Characteristics
Customers who attempt to fraudulently use a credit card at the checkout are often betrayed by specific signs of suspicious behavior. Such signs may have a perfectly reasonable explanation that has nothing to do with an unauthorized credit card use, however statistical data show that they are associated with a higher rate of fraud. You should be able to identify such signs and act according to your organization’s established fraud prevention procedures. We have written at length in previous posts about the way these procedures should be designed and recommend that you review our suggestions. Following is a list of five suspicious signs at the point of sale that you should look out for:
Purchasing large quantities of merchandise without much attention to details. This is a very strong fraud indicator! If a customer is purchasing a sizable amount of merchandise, without much care for size, color, or even price, he or she is probably interested much more in its resale value than its utility.
Rushing the cashier into a quicker processing of the payment. Although your customer may really be in a hurry, such behavior may also be intended to force you to circumvent standard fraud prevention procedures. While you would not want to delay a legitimate customer any longer than necessary, you should never forgo regular card acceptance procedures, as this is exactly what the criminal’s goal would be. Explain to your customer that you appreciate the fact that they are short on time, but you are responsible for ensuring that all payments are legitimate and cardholders’ interests are protected.
Making multiple purchases within a short period of time. If a customer completes a purchase, leaves the store and then comes right back in, he or she may be doing it because they believe that making multiple fraudulent transactions for smaller amounts is less suspicious than making a single large-amount purchase.
Shopping either right after the store opens or before it closes. A fraudster may be shopping early in the morning or late in the evening, in the hope that the merchant will not be as attentive as during other stretches of the day.
Ignoring free delivery options (where applicable). If your customer asks no questions or completely ignores a free delivery option, in favor of a quicker but paid one, this could be a warning sign.
Now, it should be reiterated that, although suspicious, a certain behavior might be perfectly well justified and explained in another, completely legitimate way. By themselves, none of the above characteristics constitutes a proof of a fraudulent activity. You should always use your observations of customer behavior in the context of the particular setting. Different businesses attract different types of customers and what is considered a normal customer behavior at one place might be interpreted as completely irregular at another.
Once you have accumulated enough evidence to conclude that a fraudulent activity may be taking place, you should contact your processor’s voice authorization center and make a Code 10 call. You should keep the card in your possession during the call and follow the instructions you are given. If the instruction is to retain the card, you should only do it if it is safe to do so and then ask your customer for an alternative form of payment. If you feel threatened or uncomfortable, complete the transaction and make the call right after the customer leaves.
Wednesday, January 27th, 2010
Card Verification Procedures
Merchants are responsible for ensuring the validity of each payment card that is presented for payment. Visa and MasterCard require that, for all card transactions, except for mail orders, telephone orders, non-face-to-face unique transactions, e-commerce transactions, and pre-authorized orders, the card must be presented to the merchant. If you follow a few simple card acceptance procedures every time a card is presented to you, you will greatly minimize the probability of fraud:
Swipe the card and request transaction authorization. Hold the card through the entire transaction. Do not complete the transaction unless you obtain authorization from the card issuer.
Verify the account number. Most point-of-sale (POS) terminals today allow merchants to verify that the card number that is printed on the face of the card matches the account number that is encoded on the card’s magnetic stripe. The verification procedure varies by terminal type. In some cases, the magnetic stripe number is displayed on the terminal or printed on the sales receipt, while in others the terminal may be programmed to check the numbers electronically. In the latter case, you will be prompted to enter the last four digits of the embossed account number, which will then be compared to the last four digits of the magnetic stripe number. Similarly, if the account number is printed on the receipt, only the last four digits will be visible. If the numbers don’t match, you will receive a “No Match” message. In such instances, you should make a Code 10 call.
Check the card’s expiration date on the face of the card. You should only accept a card that is not expired or you should request an alternative payment method from the customer.
Check the Electronic Warning Bulletin or International Warning Notices. If the account number is listed, do not complete the transaction without obtaining an authorization from the issuer.
Compare the four-digit truncated account number imprinted in the signature panel on the back of the card with the last four digits of the account number on the face of the card. These numbers should match. A non-match is a strong indicator of fraud and the card should not be accepted.
If a photograph of the cardholder is present on the card, compare the photograph on the card with the person presenting the card.
Check that the card is signed. The card is not valid unless it is signed. See below for procedures regarding unsigned cards.
For unique transactions processed in a card-present environment, request personal identification of the cardholder in the form of an unexpired, official government document. Unique transactions include transactions at Cardholder-Activated Terminals (CATs), which are usually unattended terminals that accept credit and debit cards. These terminals are frequently installed at rail stations, gas stations, toll roads, parking garages, and other card locations. However, for unique transactions processed in a card-present setting, such as In-Flight Commerce (IFC) terminals, you should compare the signature on the personal identification with the signature on the card. If the signatures do not match, you should make a Code 10 call.
If u are interested in complete merchant manuals including pos codes from MC, just send me a PM, dont worry, its free
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