How can I prevent fraud on my e-commerce site?

PSBill provides the highest level of encryption available in the industry. But no amount of encryption or security can prevent fraud if the fraudster has managed to get hold of card numbers and other details from credit cards that haven't been reported as stolen. Unfortunately, as credit and banking laws stand, it is you, the merchant, who must bear the financial cost of any fraudulent transactions. However, if you are fully aware of the risk of fraud when trading on the Internet, you stand a better chance of avoiding its consequences.

Based on the experience we have gained after many years in the business of online authorisations, we would recommend you take the steps listed on this page to help you to reduce the risk of fraud. Please note that these steps and suggestions are only a guideline, and that this is not the definitive list of precautions you can take. Fraudsters are finding new ways of committing their crimes all the time, and there is no absolute solution to prevent online card fraud.

Address verification and card security codes

Online address verification (AVS) and card security code checking (CVV2, CVC2) are now available through all the banks with whom PSBill is integrated. These services are free of charge, and we recommend that all our merchants use them. You will need to add extra fields to your customised forms in order to use these features; full instructions are in the Address Verification (AVS) and Security Code Guide, which you can download from the technical documents page.

For more information about address verification and card security codes, see our fraud control page.

Free email addresses

Be wary of transactions that originate from free email accounts (such as Hotmail or Yahoo!). Free email accounts are easy to set up and they enable a fraudster to retain total anonymity - no proof of ID is required when opening a free email account. We are not suggesting that every customer who uses a free email account is a potential villain - many people have quite legitimate reasons for using them - but the use of a free email account should be considered particularly suspicious if it occurs in conjunction with one or more of the other circumstances listed on this page.

Suspect countries

Always check your delivery addresses. Countries with the highest incidence of online card fraud include many parts of Asia (including Indonesia, Malaysia and Singapore), the Baltic region, Eastern Europe, Africa and South America.

Transaction values

Be aware of the general average value of your Internet sales. If you suddenly receive an authorised order for an amount that far exceeds your average order value, instead of calculating the vast profits you feel you are about to make from this sale, you should exercise caution.

Multiple transaction attempts

As a PSBill merchant, you have been given access to view all your transactions in the backoffice area. If you detect multiple failed attempts from the same person followed by an authorisation, this could signal fraud. With the backoffice, you have the ability to suspend settlement of such transactions using settlement control.

IP blocking

PSBill also offers the ability to block certain IP addresses from your payment facility. Unfortunately, this is not infallible. Some persistent fraudsters will merely sign in using another ISP. In these instances, we cannot prevent internet access to these people because it becomes impossible to detect a repeat attempt when a different ISP is used.

Address checks

Address verification (AVS) will do this for you automatically on most cards issued in the USA and UK. If AVS won't work on a particular card, or you are not using AVS for some reason, then you may be able to call your acquiring bank and ask for a "Code 10 check" to verify the cardholder address, although this kind of check is not available on all card types.

Deferred settlement

If you sell high value goods, then it would be prudent to defer automatic settlement until you have had a chance to vet the order.

Confirmed delivery

Signature upon delivery is NOT acceptable proof to the banks in the event of a dispute. However, if you do operate this policy, make sure that you always use a reliable delivery agent. Should you subsequently wish to raise a suspected fraud case with the police, such information would be vital in attempting to establish whether fraud has taken place.

Look like you mean business

Make it clear on your web site that you operate anti-fraud precautions, and that you will make every effort to find and prosecute fraudsters who abuse your online shopping system. Even if you lack the resources to do this, it may encourage fraudsters to look for easier targets elsewhere.

Summary

PSBill is reliant on the banks for authorisation codes. We run additional fraud checks that operate across our systems looking for suspicious patterns in an attempt to avert large hits on any of our merchants’ sites. But as the merchant, you also need to be vigilant and take responsibility for your own transactions. If in any doubt, place the transaction on hold and do not despatch the goods. Allow yourself time to investigate.

Of course, any fraud measures being implemented are a step in the right direction for the merchant and consumer alike, and we welcome any new bank initiatives in this regard. However, we can not offer you any guarantee that by using our (nor any other company's) payment system you will not encounter fraud or chargebacks.