A Data Breach Can Make Fraud Your Problem — Even If the Breach Isn’t

Hand swiping credti card
August 14, 2015

Recent data breaches at the UCLA Health System, Starbucks and the U.S. State Department are just the latest hacking incidents that have drawn national attention. While the exposure of patient, customer and employee information is serious, aren't you glad they don’t affect you? But wait, maybe they could.

Just because your data security is intact doesn’t mean you won't be on the receiving end of potential card fraud involving data stolen from someone else. Data stolen in those incidents could end up in a potentially fraudulent card transaction in your store. Are you ready to catch it?

To protect both your business and your brand reputation, revisit and sharpen your application of best practices against such fraud, As long as you follow proper card acceptance procedures, you won't be liable for losses even if fraud does occur.

With card present transactions, it's critical to inspect the card. Look carefully to confirm the card is valid and shows no signs of tampering. Be sure the digits are properly aligned; check to see that any hologram moves when the card does; and compare the name, number, and signature on the card with those on the transaction receipt.

It's tempting for employees to skip these procedures, but they're absolutely critical, especially with new EMV requirements taking effect October 1. That’s when liability for certain types of fraudulent transactions will shift from card issuers to merchants who accept face-to-face card payments and have not upgraded their equipment to accept EMV cards when one is presented.

You can also limit your vulnerability to fraud in card-not-present transactions by looking out for novel or unusual behaviors. Here are 10 transaction red flags to look for. Transactions like these might be legitimate, but they always deserve a second look:

Red Flags

  1. A new customer, especially from out of the area.
  2. Multiple card entries for high-dollar orders.
  3. Billing and shipping information don’t match.
  4. Multiple purchases of the same item.
  5. Multiple transactions from a single IP address.
  6. Sequences of similar account numbers.
  7. One card used for sending shipments to multiple addresses.
  8. Several cards used for shipping to a single address.
  9. International shipping.
  10. An unsolicited phone authorization for a cash advance.

While these and other red flags might turn out to be false alarms, if you don’t know or have an established business record with a customer, you should identify them online and vet them carefully before proceeding.

Contributed by Vanco Payment Solutions. Through the Michigan Chamber’s partnership with Vanco, you have the opportunity to accept credit, debit and other electronically based transactions at just 0.2% above cost. Email Vanco Payment Solutions or call them at 866-944-0055 to learn more.