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Credit Card Fraud – Ways Businesses Can Avoid Them

The Commerce Department has released figures that indicate increased retail sales (1.1%) in the month of February 2013 totaling $421.4 billion. This has been the highest rise since the month of September 2012. This directly means that there has been an increase in credit card transactions and an increased risk of credit card frauds and unfair practices.

 

Recent reports have found that credit card frauds have increased by as much as 87% since the year 2010 and account for a loss of $6 billion.

To get over this difficult-to-remove problem, it is important for organizations to take a few steps that would help to prevent losses for them in the already bad economic scenario that they are currently facing. Listed below are five steps that business owners of organizations can keep in mind to tide over these risky times, compiled by the team at www.essayjedi.com

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Step #1: Take Immediate Action

A security breach can occur even if best payment processing methods are made use of. In the event of such a breach, ensure that detailed credit card sales reports are available at once to be able to track down the point of fraud. This will eventually cause to terminate the breach and avoid further losses that can occur. An appropriate and timely assessment made of the attack in the initial stages may be of great help to trace the original source of the breach.

Step #2:  Be PCI Compliant

It is important for the organization to be Payment Card Industry compliant while accepting credit or debit card payments. The software security must be up to date and PA-DSS certified. This certification reinforces the fact that best practices have been observed for securing credit/debit card payment details. The responsibility to protect customers’ details is paramount. It is also important to have a PCI-audit that will ensure that the payment environment is well secured along with other applications of the back office. Such a practice can help the organization secure any loophole that may be sensed by fraudsters.

Step #3: Use Data Encryption End-to-End

End-to-end encryption (E2EE) of data starts from the device that captures the data and up to where the transaction is authorized. The implementation of E2EE technology ensures that the account data is not stolen electronically and makes it easy for the business to become PCI certified. The encryption functionality should be built into the software, devices, credit card terminals, software applications and payment capture devices for effectiveness. Ensure that your partners including payments provider is technically compliant. It is important to balance costs and service. Low cost providers may sometimes not provide the level of service that the organization demands.

Step #4: Use Tamper-Proof Systems

All employees of the organization should be familiar with the payment processing systems and their working. Fraudsters are known to tamper with the payment processing equipment to steal credit card information. They alter equipment by attaching a small piece of hardware to the credit card terminal. Employees who are familiar with the looks of the equipment would be able to identify any odd looking attachment as well malfunctioning software.

Step #5: Do Not Store Credit Card Numbers

Storing credit card numbers is a big risk to becoming PCI compliant. It is best to tie up with a payments provider who does not store credit card numbers at the organization’s site or in the software. The best service providers store customer credit card information in a cloud. Thereafter, the service provider should provide an ID for the encrypted customer data in the cloud. Any subsequent transaction with the same customer involves using the same encrypted ID. The organization never comes into contact with customer’s credit card data.

As a final note, it is essential to take precautions to protect the company’s and clients’ security and not provide any opportunity to the fraudsters to steal information from the organization.

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