How Your Business Can Improve at Avoiding Credit Card Fraud

According to the Federal Trade Commission (FTC), credit card fraud is the most commonly perpetrated type of fraud, totalling $149 million in losses in the year 2020 alone. Because of this frequency, it’s important for businesses to protect themselves. Here are some tips on avoiding credit card fraud.

Educate Your Employees on Phishing Scams

A phishing scam is when a supposedly reputable person or company sends a fraudulent email or text message that contains links to malware or other types of malicious software. Generally, the sender (the scammer) will try to entice the recipient to click on a link so they can gain access to personal information, credit card info, etc. It is one of the most common types of cyber attack.

You have probably seen such emails because they are often suspicious looking in nature or don’t use professional language. However, an adept criminal will be able to make the email appear as if it’s coming from somebody in your contacts list or from some sort of trusted authority such as the IRS, a bank, or Social Security Administration. In fact, the FTC website uses a real-world example of what a modern phishing email looks like; and at first glance, one would never think it’s a scam.

One of the easiest ways to spot a phishing scam is if the sender requests personal information from you over the phone or over email/texts. For instance, a scammer may present themselves as a bank representative and ask you to confirm your credit card number. Do NOT ever give out personal info! If the sender is asking for such information and it smells fishy, examine it more closely and get in touch with that organization’s support line to confirm if it’s really them.

Keep a Watchful Eye Out for Skimmers

Skimming is when a scammer is able to steal credit card numbers through regular in-person purchases/transactions. The scammer will usually install a fake credit card scanner that looks identical to a normal one you’d use at a store, gas pump, or bank. There have been instances of scammers installing them on ATMs, looking so innocuous that one would not think at first glance that anything is wrong. But when a credit card is inserted in the ATM, the fraudulent scanner actually records the credit card info and feeds it back to the scammer.

While this is a pretty sophisticated method of credit card fraud, a simple check on any credit card scanners in your business will go a long way in mitigating this type of scam. Additionally, be sure your credit card payment infrastructure supports EMV chips, as they are a great security measure against skimmers.

On a personal level, here are some other ways you can avoid skimmers:

  • Check for signs of tampering before inserting your card
  • If you’re unsure or you suspect tampering, avoid using that scanner and alert an employee
  • Use your EMV chip credit card (not at the ATM) to make in-store purchases

Secure Your Online Payments

Card-not-present fraud, aka payments made online, over the phone, or through mail orders, accounts for a significant percentage of credit card fraud. In fact, a 2018 study by Javelin Strategy & Research said card-not-present fraud is now 81 percent more likely to occur than in-store, or card-present, fraud.

While it can be harder to ensure online payments are in good faith, here are some ways you can identify potential card-not-present scams:

  • Orders that fail address or CID verifications
  • International orders from countries you don’t market to, for products that are readily available at local stores
  • Multiple purchases from the same card holder in a day
  • Multiple purchases from the same card but to different shipping and/or billing addresses
  • Multiple purchases from different cards but shipped to the same address

What to do if You Suspect Credit Card Fraud

Keeping a vigilant eye out for credit card fraud is all well and good, but what should you do if you actually suspect it? Here are some steps you can take if you think your business is being defrauded:

  • Contact Your Payment Service: report any suspected fraud to your credit card processing organization.
  • Contact the FTC: the FTC website has a portal dedicated to potential fraud reports. Be sure to file one if you suspect foul play!
  • File a Police Report: be sure to contact your local police department to file a report, so there’s an official record of the alleged fraud. This could be helpful to investigators if they are already pursuing a suspect or could help stop the perpetrator from committing crimes in the future.
  • Update Security Measures: reset all passwords, PINs, and implement two-factor authentication on your accounts wherever possible.

Protect Your Business with Society Insurance

We know that your business is both your livelihood and your employees’. We do all we can in order to help you protect it. By choosing Society, you’re not only getting one of the most comprehensive plans for your business, but a partner dedicated to your company’s continued success.

Contact your local Society agent to learn more!

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As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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