Many identity theft rings operate outside the United States, but target U.S. merchants through phone and Internet transactions. Statistics show many foreign fraudsters order merchandise for shipment to Indonesia, Nigeria, Ghana or the United Kingdom. Alternately, they use unwary U.S. citizens as dupes in their schemes. By hiring unsuspecting U.S. home workers to act as freight forwarders for their illegal purchases, these fraudsters make it appear that goods are shipped to U.S. citizens versus rerouted to overseas destinations.
Typically, these fraud rings operate by contacting a merchant via e-mail or phone and making a card not-present purchase. They provide a credit card number, and in some cases, images of the front and back of the card to further create the illusion of legitimacy. After fraudsters have completed an order and received merchandise, they will initiate transactions using other card numbers.
Undetected fraud costs merchants dearly through chargebacks, and merchandise loss. The key to prevention is being on guard. Receiving an authorization for a transaction does not guarantee that the card is valid.
Being aware of the danger of credit card fraud makes you better prepared to protect your business against losses. Elavon offers its clients a strong line of defense against foreign shipment fraud through the industry standard “Code 10” process, backed by the experts in Elavon’s Loss Prevention Group.
For example, if a mail order merchant receives a suspicious U.S. order or request for shipment of merchandise to a foreign country, the merchant contacts Elavon’s voice authorization department and requests a “Code 10”. The call is routed to the card-issuing bank and the card number is simultaneously forwarded to the Elavon Loss Prevention department.
A Loss Prevention representative contacts the card-issuing bank to inquire about validity of the card. They may also contact the cardholder, the ship to-address, or any other party to the transaction. If the card or transaction is confirmed to be a fraud, the merchant is contacted to stop shipment and a query is run across the entire base of Elavon merchants to determine if the same card has been used at other merchant locations. If so, the additional merchants are contacted in an attempt to stop their shipments. This proactively prevents chargebacks and losses that would be sustained by other merchants targeted by the same criminals.