Fraud hits more than the bottom line

As small and mid-sized businesses, we tend to be around a lot of optimistic people. It is the nature of what we do. There are a lot of challenges and to confront them, you have to focus on the upside. In part, this is why small and mid-sized business seem to be frequent targets of scammers and credit card fraud. For many of us, it goes beyond the financial hit. It can have an impact on morale.

We really like our customers and when a new customer comes on board, it is a great feeling. Usually, we work with customers multiple times and develop relationships, sharing photos of our family and pets and getting to know each other well. So, when it turns out a new customer is actually scamming us, there is a personal side as well as a financial side to it.

Our customers are very similar in this respect. They are also targets of scammers in their own industries. So, while we take steps to protect ourselves, we thought we’d share some of what we look for to help our customers (or any business) recognized a transaction that may be at risk. Even if this is something you know about, it’s always good to be reminded to stay vigilant.

First, it helps to understand some aspects of stolen credit cards:

1. They have a short shelf life. Once a card number has been used and identified as stolen, all transactions will be declined. So, the fraudsters are usually in a hurry to take delivery of the products.
2. The less information you have about the real cardholder, the better for the fraudsters. Obviously, they don’t want you to call the cardholder, or send anything to their actual address. They tend to give out false phone numbers and shipping addresses that don’t match billing addresses.
3. They don’t want you to talk to the issuing bank. If requested, you’ll not get the name and contact number for the issuing bank to prevent you from verifying the card.

Some indicators that you might have a fraud transaction:

Credit card billing address does not match the delivery address.
The order is “larger” than average (this is relative to your industry) and needed fast.
The buyer will not share the issuing bank name & phone number.
For B2B,
The company does not appear on Google search results.
The purchaser does not use a company email address.
The phone number consistently rings to a generic voicemail box.
The “company” address is a general warehouse location with no business name.

It is not terribly uncommon for one or two of these things to be true. But, if you have two or more, it is time to do a little more digging.