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Card Present Fraud

Merchants are particularly vulnerable to card present fraud (where the cardholder and card are present) when their card terminal’s card security features are not utilised and could lead to a chargeback dispute, financial loss and reputational damage.

Card Present Fraud

Merchants are particularly vulnerable to card present fraud (where the cardholder and card are present) when their card terminal’s card security features are not utilised and could lead to a chargeback dispute, financial loss and reputational damage.

Contactless & Chip and PIN vs. non-Chip and PIN transactions

Merchants are generally not liable for fraudulent contactless transactions and Chip and PIN remains the most secure form of card transaction with merchants not required to check the card when customers pay with their PIN. Nevertheless, it’s important to follow the prompts on your terminal at all times and be cautious when a Chip and PIN transaction occurs but the PIN is blocked or the incorrect PIN is entered.

You need to be vigilant when presented with a card that does not have Chip and PIN or the cardholder wishes to complete a transaction without using the Chip and PIN. You may be at risk of a chargeback dispute if you accept a signature and/or type in a card number into your terminal for a transaction where the card and Cardholder are present. Pay attention for potentially counterfeit cards, suspicious customers and unusual transactions.

Identifying counterfeit cards

Most cases of counterfeit fraud involve ‘skimming’ or ‘cloning’. Fraudsters copy the genuine data in the magnetic stripe from one card onto another card without the owner’s knowledge.

  • Use a Ultra Violet (UV) light to check the card as most genuine cards have special features on them that show up under a UV light
  • The fraudster may not re-emboss the card number on the card to match the numbers in the magnetic stripe so the fraud could, in these case, be easily identified by checking whether the number printed on the terminal sales receipt is the same as that on the front of the card.
  • Compare the name on the card with the signature and the signed voucher to see if there is any discrepancies
  • Is the signature strip on the card tampered with, raised or has the original signature appears to have been covered over?
  • Is there a discrepancy with the title of the card with the Does the title of the card match the gender of the person presenting it e.g. is a male using a card where the title is “Mrs”?

Spotting Suspicious customers

A customer using a stolen or counterfeit card may appear agitated or nervous when completing a transaction or is taking an unusual amount of time to sign for the transaction. There are other indicators that they may be using a stolen card.

  • A customer not particularly interested in the price of the item/s or makes hurried bulk purchases without much consideration.
  • A customer only interested in getting the maximum purchase cashback from a small value transaction.
  • A Cardholder appears unaware of the money available on their card and continues attempting to make purchases at lower transaction values until the transaction is authorised.
  • Transactions or orders much greater than your usual sale or average transaction value.
  • An unusual/sudden increase in the number and value of sales transactions caused by a customer repeatedly returning to make extra purchases.
  • Split sales with cash, cheque or second debit/ credit cards
  • A person presenting more than 1 card to find one that will be accepted.

Card Not Present Fraud

Card fraud is always a risk for businesses that accept card payments where the card is not physically present (i.e. taking payments over the phone, through a virtual terminal, or in-person sales where a business puts card details through their point of sales terminal  without using the chip security/ contactless functionality).

Multiple or bulk orders – Watch out for customers buying lots of the same item, either in the same transaction or separately

First-time customers who place multiple orders – The risk of fraud is smaller when dealing with customers you know

High-value orders – Orders larger than normal may indicate fraud. High-value items such as jewellery or electrical goods are often targeted by fraudsters because they are easy to resell, so take extra care with this type of transaction

Sales that are too easy – Be suspicious if a customer is not interested in the price and/or detailed description of the goods, but is only interested in delivery times

Hesitant customers – Customers who seem uncertain about personal information, such as their postcode or spelling of their street name, could well be using a false identity. Also watch out for customers being prompted when giving the requested information

Same name, different title – Could your customer be using the card of a family member?

Different person to the cardholder collecting the goods (eg. courier/taxi driver)

Cardholder is present but only has details of the card and not the card itself –The card details may be stolen. If you input them through your card terminal and the transaction is fraudulent, you are liable.

associated with fraud

  • Transactions on several cards where the billing address matches but different/various shipping addresses
  • Multiple transactions on a single card over a very short period of time
  • Multiple cards beginning with the same first six digits offered immediately after the previous cards are declined
  • Customer offering multiple different cards one after another without hesitation when previous cards are declined
  • Orders shipped to a single address but purchased with various cards
  • Overseas shipping address – Be careful when shipping overseas, especially if you are dealing with a new customer or a very large order
  • Different shipping address – Orders where the shipping address is different from the billing address may be legitimate (for example, when sending flowers or a birthday present) but requests to send goods to hotels, guest houses or PO boxes are often associated with fraud