Omnibasis merchants are responsible for fulfilling orders for customers and possess the most information about their customer at the time of purchase. Thus the best time to determine whether or not a payment is potentially fraudulent is at the point of a transaction. There are external indicators that indicate a payment might be fraud, such as Early Fraud Warnings, but fraud activity also has many implicit indicators that by themselves don’t unambiguously signal fraud. However, the existence of several of these indicators at the same time can more clearly suggest a payment is fraudulent.
With omniPay card payments that have an elevated risk of fraud are automatically placed into review. However, you might want to create additional rules based on the following factors to place additional payments into review—or block them completely. Although our recommendations can help prevent disputes and fraud, they can’t eliminate them completely. We want our businesses to be as informed as possible, both so that they can accept or refund any payments they believe are fraudulent and so they’re equipped to accept the financial responsibility of any suspicious payments that enter their merchant account.
Common types of fraud indicators
There are many types of fraud indicators, some of which are easy to identify such as false numbers or email addresses, other types may be more intuitive and nuanced, such as a conversation with a customer that seems off. Having an understanding of the various ways fraudsters use false information to make fraudulent transactions will better help you to protect against them. Some of the most common types of fraud indicators are:
- Use of likely false information (for example, fake phone numbers and email addresses like asdkf12495@freemail.com). Note: by default we enable email verification for new account for your customers. We also check against a known list of fake email services.
- Inconsistencies in customer details across multiple purchases (for example, using the same e-mail address but a different name for another payment). Note: we do not allow multiple users registered with the same email address, unless you disable it.
- Communication that doesn’t sounds quite right. Fraudsters often use a canned response that is sent to multiple sellers using common phrases. If any communication appears scripted, use a search engine (putting the short phrase in quotes) to see if it’s been used elsewhere (for example, this particular phrase has been used many times).
- Large orders (for example, multiples of the same item, only your most expensive merchandise, expensive items or total order amount that seems inconsistent with normal customer behavior).
- Payments (including those that have been declined) made with:
- The same card but different shipping addresses.
- Many cards that use the same shipping address.
- The same card from the same IP address.
- The same customer name/email address.
- If each failed attempt is associated with a different credit card, any successful payment carries a much greater risk for fraud.
- Similar or the same card numbers, especially over a short duration and for smaller amount. This is especially true for crowdfunding/fundraising sites.
- Note: we flag the cards that have been reported stolen or fraudulent and decline them automatically for your business.
- Any requests to:
- Split a large order into multiple payments across different cards that don’t share the same verified billing address information.
- Process a payment manually. Fraudsters may make this request in order to have the charge run with your local IP address instead of their own.
- Charge a card more than the required amount (known as an “overcharge”) and pay out a third-party (for example, driver, shipper or freight company) using a different payment method (for example, cash, money order).
- Charge a card and then provide a refund outside the card network (for example, check, wire transfer).
Note: declined payments can provide valuable information and should also be regularly reviewed.