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Stay vigilant to avoid credit card fraud

November 22, 2010
Several dealers in recent months have reported being victimized by credit card fraud directed at their parts departments. The incidents should remind dealers of the need to carefully scrutinize telephonic or other credit card orders from unfamiliar persons.



The following are some risk management measures that various organizations have recommended to reduce the risk of fraud:


  • Take extra steps to validate each order.  Do not accept orders unless complete information is provided (including full address and telephone number);
  • When taking orders, ask for the CVC 2—the three-digit number imprinted on the signature panel of the credit card. This will help verify that the customer is in actual possession of the card. If the purchaser has only the 16-digit credit card number and the expiration date, he may not physically possess the card, signaling a potentially fraudulent transaction;
  • Be wary of orders with different "bill to" and "ship to" addresses;
  • Be extra cautious with transactions involving any of the following: first-time shoppers, orders placed by fax or e-mail (particularly those originating from a free e-mail address or an e-mail forwarding address), larger-than-normal orders, orders consisting of several of the same item, orders made up of "big-ticket" items, orders shipped "rush" or "overnight" and orders shipped to an international address. Do everything possible to validate an order before shipping any product to a different country;
  • If suspicions exist about a card, call the credit card authorization center;
  • If victimized by a credit card thief, contact the merchant processor immediately and inform the processor of the situation. Be advised that some credit card companies offer a safeguards program to protect against this risk.


The foregoing is not an exhaustive list of credit card fraud prevention measures. Rather, it is intended to alert dealers to recent reports of these occurrences and reinforce the need to include credit card prevention in employee training programs.