This document outlines 10 measures that online merchants can take to reduce credit card fraud. These include geolocating users by IP address to check for high fraud locations, comparing billing addresses and IP addresses, checking for high risk countries, anonymous email addresses, proxy servers, PO boxes, invalid phone numbers/zip codes, issuing bank country matches, and directly verifying suspicious credit cards with issuing banks. The key recommendation is to use FraudLabs Pro to help implement these checks and better manage credit card fraud risks for online transactions.

1. 10 Measures to
Reduce Credit Card
Fraud for Internet
Merchants
https://www.fraudlabspro.com

2. Introduction
• There are now companies that
specialize in spam and other
illegal marketing techniques,
such as phishing and hacking,
that take advantage of every
opportunity to make money.
• In addition to this threat, there
are amateur scam artists around
the world who use the Internet to
obtain credit card and financial
information for the purpose of
fraud.
• We would like to introduce 10
preventative measures that
merchants can take in order to
minimize credit card fraud.

3. Geolocation by IP
address
• Knowing the buyers geographic
information can help to prevent
fraud.
• Geolocation tech provides the
absolute geographic location of
orders through the IP address, it
can identify the location with the
highest fraud probability.
• FraudLabs Pro can keep the
cost of authentication down as
you can target the authentication
toward the most probably
geographic locations for fraud.

4. Comparison of the IP
address country with the
billing address country
• IP address is a unique network
identifier to a user’s computer.
• To make sure the IP address
country and the billing address
are the same.
• For example, if the billing and
shipping address are the same,
but the IP address is from others
country, this will require closer
scrutiny, and will often trigger
anti-fraud precautions.

5. 5
Check whether the
country is a “high risk”
country
• Always require closer inspection
for the orders that being shipped
to an international address
• Pay more attention if the card or
the shipping address is in an
area prone to credit card fraud.

6. Check whether a free or
anonymous e-mail address
was used
• Be aware that online buyers using free
anonymous e-mail providers
• There is a much higher incidence of fraud
coming from free email services than from paid
service providers.
6

7. Check whether an anonymous
proxy server was used to place
the order
• A anonymous proxy servers allow internet user to
hide their actual IP address.
• Using a proxy server is to remain anonymous or to
avoid being detected.
• FraudLabs Pro provides a hassle free method to
keep the always up-to-date anonymous proxy server
list as web service.
7

8. Check whether the mailing
address is a mailbox or ship-
forward service
• Fraudsters prefer to stay untraceable but they still
need to collect physical merchandise
• Never send merchandise to a public mailbox
because the recipient’s physical location and
identity cannot be detected
8

9. Check whether the phone
number is valid and located
within the correct ZIP code
9
• Discover those invalid zipcode or mismatch
between the zipcode and area code will produce
fraud rates that are significantly higher than usual

10. Compare the credit card issuing
bank’s country with the billing
address country
• Make sure the issuing country and billing address
country are the same because minor banks may
not have rigorous identification procedures

11. Call the credit card issuing
bank to verify the validity of
credit card
• If have any suspicions about the order, you can
call the issuing bank and ask to confirm the
general account details
• Make sure the card is not stolen

12. Request more identification if in
doubt
• Merchants should call them for verification
through phone or request a photo ID to be faxed
if they have any doubts

13. Summary
• Every merchant should be
aware of online credit card fraud,
although it is something that can
never be completely eliminated,
but rather something that must
be managed.
• Using FraudLabs Pro can
greatly reduce credit card fraud

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please visit
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