Fraud Red FlagsThe Top 20 Fraud Indicators To Be on the Lookout For This Year

Gaining new customers is great… unless they're not really customers, of course. You should pay close attention to first-time buyers. Fraudsters are always on the lookout for a new, easy victim to target.

Any orders that are significantly larger than your average transaction in terms of dollar value should be considered suspicious. A criminal with a stolen card number knows they only have a limited time frame before the theft is discovered and the card gets shut off. So, they often try to buy as much as they can in one shot.

If you receive an order that has a lot of the same item but in different colors or sizes, proceed with caution. Fraudsters often buy multiples of the same item, knowing they can resell them later to convert the goods to quick cash.

Again, because of that limited window of opportunity, crooks move fast to try and maximize their “earning potential” when they steal a card number. So, they often go for the items with the biggest resale earning potential. It’s a lot easier to sell one $1,000 item as opposed to 50 items that cost $20 each.

Fraudsters typically buy stolen cardholder information in bulk from hackers. Multiple orders with mismatched payment information could signify a thief trying to quickly burn through a collection of stolen cardholder data while it’s all still active. It’s a sloppy tactic, but not uncommon. 

Some criminals have been known to share card numbers with friends, or order items for them. This is an especially popular ploy during the holidays, when merchants expect regular cardholders to buy gifts and ship them to others. Be wary if the buyer’s address on file doesn’t match the shipping address.

A thief might have scraped a list of credit card accounts and placed orders on each card in rapid succession. This could be a sign of “card testing,” or it could just be a sloppy, rapid-fire fraud attack. The fraudster submits multiple transactions, hoping at least one will get through.

Orders with two different cards originating from the same IP address could be normal activity. For instance, it could be a couple buying holiday gifts for one another. However, any more than that — especially several orders submitted around the same time — should be considered suspicious.

If a buyer wants to use several different payment cards on one large order, that may be another indicator of card testing. A fraudster might be using the order to find which card numbers will be approved, allowing them to submit additional purchases using the valid cards.

When an order is flagged as potential fraud and declined, the thief may quickly attempt to purchase something else that costs less. This is another form of card testing by which the fraudster tries to identify the limit and available balance of the account.

Most card-not-present purchases require the credit card expiration date. If the date entered first is wrong — and the customer tries again with a new one — there’s a chance the buyer doesn't have access to the physical card. The buyer may be simply entering junk information or is trying to guess the expiration date.

Customers who have trouble supplying personal information on phone orders may not be the cardholder at all. A real customer shouldn't find it difficult to provide personal details, like the billing and shipping address.

Everyone makes mistakes. That said, too many oddities in one order should be cause for concern. Repeated typos or odd grammar could be indicative of offshore fraudsters who do not use English as a first language.

Some customers repeatedly request updates about the shipping process or seem overly concerned about shipping. This could be because the individual is worried the products won't leave your warehouse before a fraud attack is detected.

Some fraudsters seem totally uninterested in shipping details. In fact, they’re often happy to pay for rush shipping, and don’t care at all about the extra expense. Why should they? After all, it's not their money they are spending. The fraudster’s only goal is to get the job done quickly, so paying extra using someone else’s money is no problem.

Fraudsters know that it's nearly impossible to be caught and/or prosecuted for eCommerce fraud perpetrated in another country. As a result, they feel like they’re facing less of a risk to attack a seller across the border. You want to double-check international orders and screen them carefully for any other fraud red flags. Also, be aware of countries that are fraud-origin hot spots. For instance, an order originating from a country in Latin America or the Asia-Pacific region is 60% more likely to be fraudulent than one originating in the US.

Fraudsters are wise to a lot of standard fraud detection techniques. They’re always looking for ways around them, and are happy to take advantage of new shopping technologies and channels. With in-store pickup, for example, you can't check for red flags associated with different shipping and billing addresses. A fraudster could make a purchase, then impersonate the legitimate buyer to pick it up in store. 

Most customers are careful about big-ticket purchases like electronics or home appliances. It’s normal for a buyer to ask about return or exchange policies, warranties, rebates, and the like. Again, fraudsters want to get away quickly, so they're not likely to ask any questions that might cause a delay or extend your interaction.

Customers can order via phone without using their own voice by deploying a deaf relay system. This could be twisted for fraudulent purposes, though, as the deaf relay system obscures the user’s voice. Be overly cautious, requesting additional personal information to prove legitimacy.

Fraudsters are trying to place the order quickly and get off the phone. So, when the order-taker starts asking for specifics about the item, criminals are more likely to have a "Yeah, whatever" attitude just to speed up the process.