Fraud prevention tips for small businesses

Article provided by Authorize.net

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Fraud detection and prevention are essential for the security and success of your business. According to the Cybersource Fraud Report, online fraud costs merchants billions of dollars annually, and over the next five years, analysts project that small and midsize businesses will be hit with more than $130 billion in losses due to payments fraud.1  To ensure the success and longevity of your business, it is crucial to implement effective fraud filters and prevention measures. 

So, what are fraud filters?

Fraud filters come in different forms – IP, database, and limit filters – all three are enabled through Authorize.Net's Advanced Fraud Detection Service which can help process transactions safely and efficiently.

Let’s walk through the benefits of each.

IP Filters

One of the key components of fraud prevention is the use of IP filters, which offer several notable benefits. IP Filters enable you to isolate suspicious activity from specific IP addresses, regions, or known fraudsters. You can even set daily and hourly limits on the number of transactions allowed to process through your account.

  • Authorized IP Addresses: Designate specific server IP addresses that are authorized to submit transactions.
  • IP Address Blocking: Block transactions from IP addresses known to be used for fraudulent activity.
  • IP Shipping Address Mismatch Filter: You can compare the shipping address provided with an order to the IP address of where the order originated to determine whether the order is shipping to the country from which it originated.
  • Regional IP Address Filter: Flag orders coming from specific regions or countries. You can choose to customize the filter actions based on an entire geographic area or select country by country how to process flagged transactions
  • Transaction IP Velocity Filter: Isolate suspicious activity from a single source by identifying excessive transactions received from the same IP address.

Database filters

  • Shipping-Billing Mismatch Filter: Identify high-risk transactions with different shipping and billing addresses, potentially indicating purchases made using a stolen credit card.
  • Enhanced AVS Handling Filter: The Address Verification Service (AVS) is a standard feature of the payment gateway that compares the address submitted with an order to the address on file with the customer's credit card issuer. You can choose to reject or allow transactions based on the AVS response codes. AFDS includes a new AVS filter that assists the decision process by allowing merchants the additional options of flagging AVS transactions for monitoring purposes or holding them for manual review.
  • Enhanced CCV Handling Filter: Like AVS, Card Code Verification (CCV) is a standard feature of the payment gateway. CCV uses a card's three- or four-digit number to validate customer information on file with the credit card association. Like the AVS Filter, the CCV Filter allows you the additional options of flagging CCV transactions for monitoring purposes or holding them for manual review.
  • Shipping Address Verification Filter: This verifies that the shipping address received with an order is a valid postal address.

Limit filters

  • Amount Filter: Set lower and upper transaction amount thresholds to restrict high-risk transactions often used to test the validity of credit card numbers.
  • Hourly Velocity Filter: Prevent high-volume attacks common with fraudulent transactions by limiting the total number of transactions received per hour.
  • Suspicious Transaction Filter: Reviews highly suspicious transactions using proprietary criteria identified by the Authorize.net Fraud Management Team.

Keep your business and customers safe with fraud protection from Authorize.net.

 

1 Jupiter Research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023.