Tips to Help Prevent Online Fraud

You don’t want to scare customers off with too much red tape, but you do want to safeguard your business by establishing some basic fraud prevention measures. There’s a lot you can do, but make sure you maintain a balance between keeping your business safe and keeping it customer-friendly. And remember - no single technique will make your business fraud-proof.


  • Use postal insurance
  • Use package tracking services
  • Use a trusted courier that requires the recipient’s signature on delivery
  • Suspend the delivery if you become suspicious of fraud
  • Don’t offer shipping to high-risk areas
  • Don’t ship an order until additional identity and payment checking is complete


  • Validate all the details of each order
  • Keep records of order statistics so you can build up a picture of typical orders
  • If you’ve identified patterns of fraud, make sure alerts are triggered when an order fits the pattern


  • Make sure the customer genuinely exists
  • Keep records on customers with good purchase histories and on those you’ve had trouble with
  • Use a means such as AVS (Address Verification System) to make sure the customer’s physical address is valid
  • Make sure both the billing and shipping addresses are valid, especially if they are different
  • Keep records of all contact you have with customers
  • Use a means such as online phone books to check that a supplied phone number is valid
  • Ensure any email or web addresses are valid and reputable
  • Ring the customer to verify their order
  • Make it clear to all customers that orders and payments will be authenticated before shipping
  • Warn customers that their transaction details and their IP number (Internet address) will be recorded
  • Keep records of customer purchases to establish their typical buying patterns

Credit cards

  • If in doubt, ask for an independent copy of the customer’s signature
  • Ask the customer to fax the front of their credit card
  • Keep a record of credit card numbers you’ve had problems with or suspicions about in the past
  • Find out the card’s issuing bank and country of origin and make sure they match the information you’ve been given by the customer
  • Use a means such as CVV2, SecureCode or CID (depending on the credit card vendor) to help make sure the card information hasn’t been stolen
  • Call the issuing bank and verify the customer’s details

Credit Card Fraud Detection Services

Another step you can take to protect yourself against online fraud is to use a fraud detection service like MaxMind. MaxMind scores each transaction and alerts you when transactions look fraudulent. It does this by checking geographical locations, addresses, emails, Internet details and bank numbers. This information is also made available so you can make further checks by yourself. You have to pay for services like this, so there are different levels of protection offered to suit your risk levels and your pocket.