Fraud Prevention Resources

Transaction Fraud occurs when a stolen payment card or its data is used to generate an unauthorised transaction via a customer not present (CNP) transaction.

Customer not present transactions refer to when the cardholder is not physically present for examination at the time of payment. These payments occur when a payment is made on the internet, over the phone or through mail order. These types of payments are more susceptible to fraud because they are not protected by Chip and Pin.

MOTO (Mail Order Telephone Order) payments allow businesses that operate remotely to process debit and credit card payments from their customers, via telephone, letter, or email requests.

Any transaction that doesn’t have the customer with their payment card present is at a higher risk of being fraudulent and MOTO payments are no exception. MOTO transactions are deemed higher risk and more caution should be taken when receiving payments via this channel. These transactions are not protected by the card issuer and the liability would sit with the merchant as there is no physical signature or record of a personal identification number (PIN) that could prove the charge is valid. It is also harder to detect fraud with a MOTO transaction because of the lack of physical evidence connected to the individual who authorised the payment.

Payment Fraud including identity theft: Occurs when a fraudster uses a stolen or fake credit card to buy goods/services.

Friendly fraud (Also known as Chargeback Fraud): Occurs when a consumer (or fraudster) makes an online/ MOTO payment with a credit card but then requests a chargeback from the issuing bank after they’ve received the goods or services.

Interception fraud: Occurs when a fraudster uses a stolen credit card along with the same billing address and shipping address that is linked to the card and then intercepts the goods before they are delivered; this may occur by a fraudster calling after the order is placed and before it has shipped. Then they will ask for the delivery address to be changed. They may also contact the courier to change the route of the package to a different address of their choosing.

Mail Order Telephone Order

Liable party – Merchant

Online payments taken using 3-D Secure

Liable party – Issuing Bank

Online payments taken without using 3-D Secure

Liable party – Merchant

When manually keying a cardholder’s card details into a point-of-sale terminal the liability for fraud shifts from the card issuer to the merchant.

In these cases, the sale is treated the same way a MOTO (mail order telephone order) payment would be for transaction fraud. Please see our guidance for avoiding MOTO fraud. To ensure the liability is shifted to the card issuer, the cardholder needs to use their card in person, either contactless or chip and pin.

• Unusually large orders or orders for multiple quantities of the same item
• Several orders received within a short space of time, often in increasing value
• Orders using multiple credit cards, especially where the first 12 digits of the card are the same and only the last four are different
• Orders requiring ‘urgent’ shipping or delivery to a Post Office box or third party
• Orders from someone who is not the owner of the card
• The cardholder claiming, they cannot provide the CCV
• AVS mismatch on the Billing address provided
• Different shipping and billing address

If any of the above indicators are present, we would always encourage you to exercise caution. If you’re not satisfied that a payment is genuine, ClearAccept recommend that the goods and services are not provided and that the payment be refunded immediately.

If any of the above red flags are present during a transaction, we recommend that you complete additional due diligence by:

• Requesting a short video of the card holder confirming their name, holding their credit card AND obscuring part of the card number along with a picture of their photo ID showing their address. 
• This allows you to evidence the cardholders identity and confirm the address to which the credit card is registered and to which you are shipping. For genuine customers, this will take less than two minutes. For fraudsters, it’ll put them off entirely.

Always ensuring the billing address and delivery address are consistent and that the AVS check matches.

If there are any concerns regarding any transactions, then the goods and services should not be provided and the payment should be refunded as soon as possible to prevent any potential chargebacks.

• Cardholder’s name as it appears on the card
• Card expiration date as it appears on the card
• Billing address. We would always recommend that the billing address and delivery address are consistent.
• Card security code
• Phone number and/or email address
• Account number
• It also helps if merchants keep copies of order forms and obtain proof of delivery to the Billing address provided by the buyer.
• Document any conversations with your customers (in case you need to use them as evidence)

Download our Chargeback Guidance for Merchants.

Recurring payments are transactions initiated by the merchant, for which you have an agreement with the customer to periodically charge their card for an agreed-upon amount.

For the first transaction, 3D Secure Authentication is required. This means that if there are any reported fraudulent transactions, the responsibility lies with the card issuer.

However, for subsequent transactions, they do not undergo 3D Secure Authentication, and in such cases, the responsibility for any reported fraudulent transactions falls on the merchant.

Please make sure to promptly respond to and action any customer requests to cancel these agreements. Doing so will help minimise the occurrence of chargebacks and reports of fraud associated with these transactions.