A list of simple fraud prevention measures a merchant should observe.

1. Billing address entered by a customer should be verified and compared with the automated Address Verification System (AVS), which has a complete profile of a credit card holder including the address to which monthly statements are sent, an Address Verification System should be a part & parcel of any payment processing equipment or software, a merchant should observe this as a mandatory exercise.

The AVS was created to shield MOTO (Mail Order / Telephone Order) businesses from fraud, but the process is limited to curbing online fraud, the internet provides a window of opportunity for global commerce, however for the moment the AVS is available for US addresses only.

The internet has benefited companies that market software online, it allows customers to buy the software and instantly download it, the AVS unfortunately does not provide protection to a merchant in this case, the identity thief will have address particulars of the fraudulently acquired credit card and because the transaction has no merchandise to physically deliver, these companies become easy victims of fraud on the net.

2. It is therefore very important to ensure that there is no mismatch in the shipping address and the billing address. Many merchants do not accept orders which have a billing address that is different from the shipping address, this policy is confined to international customers as well as domestic customers.

There are instances where a customer has to call an online merchant and provide verification details, because the merchandise ordered was to be delivered as a birthday gift to another city, and in instances like these the billing address will obviously be different from the shipping address.

3. Another important verification feature for a merchant is to keep a check on orders which have a free subscription email address. Many fraudulent transactions more often have these email addresses, because a free sign-up to these email domains does not require a process in which the antecedents of the user can be verified. Additional checks need to be done for customers using these email accounts, although not all of them can be fictitious.

4. There are instances in which the email address entered may appear to be of a domain, such as mike.sanders@mynigeria .com. In such cases the merchant needs to verify the authenticity of the domain, by pre-fixing mynigeria.com with a www (www.mynigeria.com) in the URL of a browser and if it is an existing domain, the address indicated in the website needs to be compared with that of the billing/shipping address, for example if the website has a US address and the billing /shipping address leads to Nigeria, then caution needs to be observed.

And as an added verification process, if the domain appears to be legitimate with no mismatch of the address, a further check in WHOIS will certify the genuineness of the domain; there are many domain registration websites where WHOIS checks can be processed.

5. A merchant should be vary of orders that appear to be different, instances where unusually large quantity of the same product is being ordered or when the customer offers to pay an extra charge for expedited shipment. These orders can be cleverly spotted for the unusual ordering pattern, which tend to be different from the day-to-day legitimate ones.

6. The other solution to confirm the authenticity of the person placing the order online is to call the customer on the telephone, and summarize the order details, this verification more or less establishes the genuineness of the person placing the order.

7. It is in the fitness of things to collect as much data as possible on the order placed, a verification of the customers address and telephone number, the credit card issuing bank details and the IP address of the computer, are some of the basic checks that will help prevent or even tracking fraud, some of the verifications need to be done indiscreetly and these should be done by an agency that has all the possible data on fraudulent credit cards in circulation.

8. A prominently placed warning on the website stating that fraud detection software is protecting the website, and fraud will be tracked and prosecution proceedings will be initiated. This will deter potential fraudsters.

9) The never process (factor) for someone else should be scrupulously observed, it is a breach of agreement that can cost the company dearly.

10) Offering real time service to customers will help the online business grow; a professional customer service pays and wins the appreciation of millions of customers.