During a recession acquirers are more inclined to see a merchant’s increase in sales as a risk. Legitimate merchants showing too much growth over a short period of time can be deemed high risk and the acquirer may decide to implement or increase reserves. But merchants who find themselves in this scenario can take steps to avoid credit controls.
There have been a number of recent articles outlining how the economic downturn will result in increased fraud, which I believe have inaccurately portrayed the real fraud risks in an economic recession. While many make the case the fraud will increase during times of economic uncertainty, we are also seeing companies paying closer attention the books and taking measures to limit losses while sales and margins continue to erode.
New legislation may provide fraudsters with legal loopholes. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act includes regulation that prohibits providing information about newly opened accounts before they are activated by customers, which could create an increase in fraudulent credit card applications.
Don’t learn the hard way about what a disgruntled employee is capable of doing. Fannie Mae waited to remove root access from a terminated employee and almost suffered dire consequences. Managers need to think about procedures and practices to protect their companies exposure when letting employees go, especially those in payments or fraud departments.
If a fraudster or fraud ring can sucessfully perpetrate fraud, you can pretty much assume they will continue to do so until you stop them. Profiling three cases we look at the ‘typical’ cybercriminal, a computer savvy male under 30, and why they continue to engage in cybercrime even after being caught once before. Getting into the mindset of a cybercriminal may just help you stop them.
Many credit and debit cards boast zero fraud liability but there are fundamental differences in the legal obligations of issuers to cover fraud losses between credit cards and debit cards. Additionally, zero fraud liability may only apply to signature-based debit transactions for certain card brands – so using your debit card with the PIN at the point-of-sale may change your fraud liability rights.
All too often employees with easy access to the business’ or customer’s financial information take advantage of lax monitoring and security procedures. Here we profile several cases of individuals who took advantage of their employer, friend or neighbor’s lack of checks and balances.
Requiring customers to provide the card security code (CSC, CVV, CVV2, CID) at checkout will reduce fraud attempts, but can also cause a decline in sales conversion. Adding this step to the checkout process has shown to cause a nominal reduction in sales conversion, but how severe are the consequences?