Credit Card Fraud Threatens Small Businesses

Credit card fraud seems to becoming a favorite of amateur criminals as rates begin to increase. The danger of credit card fraud affects three groups. The first group includes customers like you. Discovering you are the victim of credit card fraud and then trying to sort the situation out can be costly in both resources and time, and is never a fun experience.

The second group to be affected includes the businesses handling transactions. As soon as credit card fraud is discovered banks and credit companies require that the business make reparations in the form of a charge back, which is a process wherein the original charge to the card is demanded as compensation for the loss to the customer. This affects the third group, the banks and credit card companies, by potentially losing them money. The chargeback is designed to prevent that.

Credit Card Fraud and Charge Backs

Banks and credit companies generally have far, far more power than small businesses. Law is behind the banks, and whenever credit card fraud is discovered it is the business that must pay the bank for the difference. Sacrificing the income from what they thought was a legitimate sale so that the bank doesn’t have to suffer a loss of its considerable wealth is the reality of how this operates.

One of the additional problems is that banks seem to place the blame on small businesses, despite the fact that any businessman worth his salt will have security measures in place. It’s pretty easy to spot credit card fraud if you know how. Problems with the card and signatures that don’t match can be spotted right away so that the transaction doesn’t go through.

Telephone and internet orders, which make up the majority of sales for most businesses, pose a greater risk. International sales become possible, and many times credit card fraud is perpetrated by people living overseas. This, too, can be tracked by discovering IP addresses that differ from the claimed address. These security measures eliminate most of the credit card fraud.

The rest of the blame falls on the shoulders of the banks, which employ no security measures whatsoever to prevent this. All a person needs to commit credit card fraud is the card and knowledge of the holder’s address (and sometimes phone number). If banks introduced PIN systems like with personal banking cards it would help to eradicate credit card fraud.

In the mean time the reality is that credit card fraud still exists and threatens small businesses. Any company that has ever fallen victim knows how inconvenient it can be when the seemingly gigantic sale from last week turns out to be false and is then charged back to the credit company or bank. Most businesses quickly step up personal security measures, begin new training and create policy to prevent reoccurrences.

How Consumers Can Prevent Credit Card Fraud

Credit card fraud is a big part of identity theft and threatens a great many people. The best way to combat it is to adopt a policy of awareness and security that prevents problems from arising. The very first thing to do is to never leave your cards lying around – not even for a second. Someone can quickly snatch up your card or copy down your details while your back is turned.

Make sure you always keep cards inside of a wallet or purse that you keep in a safe place at home. Keep it out of reach of children to prevent unintentional or accidental credit card fraud from occurring. This is important because unauthorized use is a serious catalyst for charge backs that punish florists and other small businesses.

You should always analyze your monthly bill to see if every transaction is in order. If you discover glaring errors or that a purchase you’ve never made appears, contact your bank immediately to report it. The faster you react the sooner credit card fraud damage can be averted. Store your records in a safe place so that you can go back and compare or check them in the future, if needed.

Additional Measures Being Taken Against Credit Card Fraud

Credit card fraud is recognized as a major issue, especially with the dominance that the internet shows over how people spend. Some companies are proposing the introduction of PIN systems that will function identically to your bank charge or debit card. It is expected to see these systems introduced in 2010, at which time businesses will be required to invest in new equipment to read the new cards.

The cards themselves will undergo structural changes to include a microchip system that increases security. It is hoped that these combinations will limit or eliminate credit card fraud and help protect everyone from the harm that it causes.

Copyright (c) 2008 Brant Florist

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