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ONLINE FRAUD GUIDE

Anyone conducting online transactions runs a risk of being defrauded. This article outlines specific things you can look out for and steps you can take to minimize that risk.<br>

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ONLINE FRAUD GUIDE

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  1. www.ipaytotal.com ONLINEFRAUD GUIDE

  2. +44 800 7765988 60 WindsorAvenue London England SW192RR +1 845 2154017 support@ipaytotal.co m

  3. INTRODUCTION Anyone conducting online transactions runs a risk of being defrauded. This article outlines specificthingsyoucanlookoutforandstepsyou cantaketominimizethatrisk.

  4. OVERVIEW • Legalstuff • Howbadcoulditbe? • Online credit cardfraud • Othertypesofonlinefraud • Assess yourrisk • Thingstowatchoutfor • High-riskareas • Preventivemeasures • Whattodoifyou'vebeendefrauded • Conclusion • commontypesofonlinefraud

  5. DOLLARS GUIDE TO HOW TO LOSE A MILLION (OR NOT): A MERCHANT'S ONLINE FRAUD PROTECTION Whensomeoneisdeceptiveormisrepresentsthetruthtogetthingsthey're notentitledto,they'recommittingfraud.Unfortunately,thishasalwaysbeen a problem for the business community. Now, with the advent of ecommerce,merchantswhotradeonlineneedtobeawareofthepotential for loss through fraud. Anyone who conducts online transactions is at risk, including those using osCommerce. But there are warning signs you can look out for and steps you can take to minimize that risk. This article is relevant to anyone starting out in ecommerce or for the seasoned ecommercemerchantwhowantstolearnmoreabouttheriskstheyface. Theriskoffraudshouldn'tscareyouoffecommerce.Ouraimistohelpyou become more aware and protect yourself. If you have money, there's no shortage of people around the world who will steal it from you in any numberofways.Butobviouslymanymerchantsaresuccessfulinspiteof this.Thekeyistobeawareofhowyourbusinesscouldbethreatenedand reduceyourlikelihoodofbecomingavictim.

  6. LEGAL STUFF Wearen'tlawyersorexpertsononlinefraud.Thisarticleisdesignedtobean introductionforpeoplewhoaren'tawareoftherisks,and/orhowtorespond to them. We urge all readers to investigate fraud risk and prevention thoroughly, and to seek expert advice where necessary. The information containedinthisdocumentisprovided'asis'withoutwarrantyorguarantee of any kind. The entire risk as to the results and the performance of the informationisassumedbytheuser,andinnoeventwillIPayTotalbeliable foranyconsequential,incidentalordirectdamagessufferedinthecourseof usingtheinformationinthisdocument.

  7. HOW BAD COULD • EFFECTS OF ONLINE FRAUD • Asamerchant,beingavictimoffraudcanhavearangeof effectsonyourbusiness.Theseeffectsinclude: • Immediatefinanciallossduetostolenstock/earnings • Damagedreputation • Loss of customertrust • Loss of investorconfidence • Loweredsales • Extracostsoftime/moneytomanageeachfraudincident • Lowered staffmorale • Possible legalcosts • Loweredvalueofyourstock/services • Additionalbankfeesfortransactionreversal • Potentialproblemsretainingyourmerchant'sbank accountaftertoomanyreversedtransactions IT BE? THE

  8. Online credit cardfraud Theftofgoodsandservicesthroughcreditcard fraudisthemostimportantformoffraudtobe aware of, as online merchants are particularly vulnerable. Because you're unlikely to meet your customers face-toface, it can be hard to knowwhetherthecreditcardpaymentyou've accepted is really from a valid customer. If it isn't, you may lose both the product and the payment.Andwhilecreditcardholdersusually have limited liability, merchants shoulder the fullcostofafraudulenttransactionandrelated fees.Whilemostofthematerialinthisarticle relates to online credit card fraud, you should alsobeawareofotheronlinefraudsthataffect merchants.

  9. OTHER COMMON TYPES OF ONLINE FRAUD • Merchantsareaffectedbymanytypesoffraudotherthancreditcard fraud.Thissectiondoesn'tdescribethemall,buttherearesometypes offraudyoushouldbeespeciallyawareof.Youmaybevulnerableto thefollowing: • Online intellectual propertytheft • Misrepresentedidentityoridentitytheft • Bogusemailsandwebsitesusedto'phish'forconfidentialdata • Pagejacking • Advance feescams • Bad checkscams • Fake postal moneyorders • Wire transferfraud

  10. No matter what the scamis... Don'tfeelthatyouhavetoreplyto everysuspiciousletteroremail.In mostcasesthere'snotmuchyou can do by directly contacting a scammer. However, in some instancesyoumaywanttoreport the fraud attempt to the appropriateauthorities.

  11. ASSESS YOUR RISK If you have difficulty answering the questions below, or if you answer 'no' or 'none', you should increase your awareness of fraud and improve fraud-related businessprocesses. Whatfraudpreventionandmonitoringproceduresdoyouhavein place? Doyouhaveapolicythatoutlineshowthebusinesstreatstheissue offraud? Howmuchmoneyandcustomertrustcouldyoulosetofraud before your businessis seriously crippled? Doyouletcustomersknowthatorderswillbeauthenticatedtorule outfraud? Doyoumanuallycheckeachsuspiciousorder/customerprofile? Whomonitorsandanalyzesfraudrelatedactivity,andwhofollows up onsuspicious orders? Arerelevantemployeesinyourbusinessawareoffraudwarning signsandhowtoreportthem? Doyoukeeprecordsofcustomertransactions? Doyoukeeprecordsoforderstatisticsforindividualstock items/services? Doyouknowwhichcountries/areasareconsideredhigh-riskfor onlinefraud?

  12. SouthwestAsia • Turkey • Ukraine • Yugoslavia • Africa • Amsterdam inHolland • Belgium • Bulgaria • China • EasternEurope • Egypt • Ghana • Indonesia • Israel • Lithuania • Malaysia High-risk areas for onlinefraud The countries/cities on the following list are considered as high-risk for online fraud, though not every order from these areas will be fraudulent. And remember: safe transactions aren't guaranteed just by shipping to areas outside thislist. • Russia • Malmö inSweden • Nigeria • Pakistan • Palestine • Romania The key is to examine ordersfrom these areas with morecaution.

  13. You don't want to scare customers off with too much red tape, but you do want to safeguard yourbusinessby establishing some basic fraud prevention measures. There's a lot you can do, but make sure you maintain a balance between keeping your business safe and keeping it customer-friendly. And remember - no single technique will make your businessfraud-proof. Preventivemeasures • SHIPPING • Use postalinsurance • Use package trackingservices • Useatrustedcourierthatrequirestherecipient'ssignatureondelivery • Suspendthedeliveryifyoubecomesuspiciousoffraud • Don'toffershippingtohigh-riskareas • Don'tshipanorderuntiladditionalidentityandpaymentcheckingiscomplete • ORDERS • Validateallthedetailsofeachorder • Keeprecordsoforderstatisticssoyoucanbuildupapictureoftypicalorders • Ifyou'veidentifiedpatternsoffraud,makesurealertsaretriggeredwhenan order fits thepattern

  14. Makesurethecustomergenuinelyexists • Keeprecordsoncustomerswithgoodpurchasehistoriesandonthoseyou've had troublewith • UseameanssuchasAVS(AddressVerificationSystem)tomakesurethe • customer's physical address isvalid • Makesureboththebillingandshippingaddressesarevalid,especiallyiftheyare different • Keeprecordsofallcontactyouhavewithcustomers • Useameanssuchasonlinephonebookstocheckthatasuppliedphone number isvalid • Ensureanyemailorwebaddressesarevalidandreputable • Ringthecustomertoverifytheirorder • Makeitcleartoallcustomersthatordersandpaymentswillbeauthenticated beforeshipping • WarncustomersthattheirtransactiondetailsandtheirIPnumber(Internet address) will berecorded • Keeprecordsofcustomerpurchasestoestablishtheirtypicalbuyingpatterns CUSTOMERS

  15. Ifindoubt,askforanindependentcopyofthecustomer'ssignature • Askthecustomertofaxthefrontoftheircreditcard • Keeparecordofcreditcardnumbersyou'vehadproblemswithorsuspicions about in thepast • Findoutthecard'sissuingbankandcountryoforiginandmakesuretheymatch • theinformationyou'vebeengivenbythecustomer • Useameanssuch as CVV2,SecureCodeorCID(dependingonthecreditcard vendor)tohelpmakesurethecardinformationhasn'tbeenstolen • Calltheissuingbankandverifythecustomer'sdetails • CREDIT CARD FRAUD DETECTION SERVICES • Another step you can take to protect yourself against online fraud is to use a frauddetectionservicelikeMaxMind.MaxMindscoreseachtransactionandalerts you when transactions look fraudulent. It does this by checking geographical locations,addresses,emails,Internetdetailsandbanknumbers.Thisinformation is also made available so you can make further checks by yourself. You have to payforserviceslikethis,sotherearedifferentlevelsofprotectionofferedtosuit yourrisklevelsandyourpocket. CREDIT CARDS

  16. WHAT TO DO BEEN IF YOU'VE • DEFRAUDED • Therearecertainthingsyoushoulddoassoonasyouconfirmthat fraudhastakenplace.Thoughitmayproveimpossibletorecover lost goods or earnings, you can take action and hopefully prevent thereoccurrenceofthatparticularfraud. • Recordallcircumstancesconnectedwiththefraud–order details,customerinformation,dates,times,etc • Ifthefraudinvolvesastolencreditcard,contacttherightfulcard holderifpossibleandalertthemtothetheft • Immediatelycontactthecreditcardprocessororbankusedin • the fraudulenttransaction • Ifyoubelieveyou'vereceivedmoneyfromatransactioninvolving astolencreditcard,contactyourownbankabouthowtorefund themoneytothecardholder • Contactpoliceorotherrelevantauthoritiestoreportthecrime

  17. Conclusion BUT DON'T DEAL WITH SCARY PICTURE, WE MAY HAVE PAINTEDA BE PUT OFF THE ISSUE O F DOTHESAME- ECOMMERCE. STORES ALL OVER THE WORLD FRAUD EVERY DAY AND JUST MAKE S URE YOU YOU CAN AND VIGILANT. ARE STILL SUCCESSFUL. S TAY EDUCATED IF YOU PUT SYSTEMS THAT THE RISK. APPROPRIATE PREVENTIVE MEASURES IN PLACE AND HAVE FOR FRAUD, CHECK TRANSACTIONS YOU CAN MINIMIZE

  18. ONLINE INTELLECTUAL PROPERTY THEFT Youhaveintellectualpropertyrightstoanymaterialyou'vecreated.Thismeans you own exclusive rights to use, publish or sell that material. But when this materialisinelectronicformontheInternet,itcouldeasilybecopiedandused withoutyourpermission.Text,imagesandmultimediayou'vecreatedforyour ownwebsitecouldturnuponsomeoneelse'ssite,forexample.Orperhapsthat softwareprogramyouwrotegetsillegallycopiedanddistributedforfreewhen you intended to sell it. Whenever your intellectual property is stolen via the Internet,you'reavictimofonlineintellectualpropertytheft. IDENTITY THEFT It'seasytostoreandaccesspersonalinformationontheInternet.Unfortunately, that means it's also easy for people to obtain this information illegally. This is identitytheft.Stolendetailssuch as names,addresses,birthdates,andaccountor cardnumbersallbuildupanidentitythatcanbeusedtocommitfraud.Because online trading isn't face-to-face, it's easy for someone to hide behind a stolen identityandmakefraudulentpurchasesorrequests Common types of onlinefraud

  19. Any email or website that requests private information such as credit card numbers,accountnumbersorpasswordsmaybeanattemptat'phishing'.Any informationyousendtoaphishermaybeusedunlawfully.Eveniftherequest looksgenuine,itisstillsensibletomakeindependentchecksonitsvalidity.For example, if you receive an email from a bank asking to confirm an account number,don'treplyimmediately.Ringyourbanktoconfirmtherequest,and don'tuseanyphonenumbersincludedintheemail–theycouldbefake. PAGEJACKING Ifyouclickonalinkandfindyourselfatanunexpectedwebsite,youmayhave been'pagejacked'.Thishappenswhensomeonestealspartofarealwebsiteand usesitinafakesite.Iftheyuseenoughoftherealsite,Internetsearchengines canbetrickedintolistingthefakesiteandpeoplewillvisititaccidentally.The fakesitecouldcontainunwantedoroffensivematerial.Asanonlinemerchant tradingviaawebsite,youneedtoknowthatyoursiteisn'tbeingstoleninthis way.Unfortunatelyyoucan'tpreventpagejacking;youcanonlydealwithitafter you knowit's a problem. PHISHING

  20. An advance fee scam is fairly easy to identify – you will be asked for money or goodsupfrontinreturnforgivingyoucreditormoneylater.Theseadvancefee scamscanseemconvincingandhavetakeninmanypeople.Oneexampleofan advancefeescamplaysoutinonlineauctions.Ifabuyersendsyouacheckfor muchmorethanyouasked,besuspicious.Ifyouacceptthecheckandrefund theextramoneytothebuyer,youmayfindoutlaterthatthecheckwasbadand thatyou'velostthewholeamount. BAD CHECK SCAMS Always be wary of unusually large orders, even when the customer is paying in advancebywiretransfer(anextremelysafemethodofpaymentwhenperformed bank-to-bank). Though the transaction could be perfectly legitimate, pay attentionifthecustomerasksforyourbank'saddressorsuddenlyaskstopayby checkinsteadofbytransfer.Inboth cases,thecustomermaybeabouttopulla badcheckscam.Bothscenariosallowthecustomertodepositmoneyintoyour accountbycheck.Ifthecheckisacleverfakeandyouacceptitaspayment,you loseboththemoneyandthemerchandise. ADVANCE FEE SCAMS

  21. Usuallyamoneyorderisoneofthesafestwaystoreceivepayment.Theamount isprepaidbythecustomer,andabankpassestheamountontothemerchant. Because the money is handled via a third party and can be transferred internationally, many online transactions are made using money orders. They're difficulttocounterfeit,butbeespeciallycautiousofmoneyordersfromhigh-risk areassuchasAsia,Africa,EasternEurope,theMiddleEastorRussia,ascounterfeit moneyordersfromtheseareasareunfortunatelybecomingmorecommon. WIRE TRANSFER FRAUD As long as you avoid transfers via cash offices and stick to transfers performed bank-to-bank,wiretransferisaverysafewaytomovemoneyaround.Thisdoesn't applyifyou'reaskedtoacceptmoneyandthenpassitontosomeoneelsevia wiretransfer.Ifthathappens,besuspicious,especiallyifyou'reaskedtodothisby anyone you don't know well. You may think you are helping someone, but actuallythisisaformofmoneylaunderingusedbyorganizedcrime.Thoughyour money isn't being stolen, falling victim to wire transfer fraud can get you into trouble withthe authorities. FAKE MONEY ORDERS

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