This featured video was created using artificial intelligence. The article, however, was written and edited by actual payment experts.
In a Nutshell
Every merchant knows the risk of fraud is a serious issue that seems to get worse every year. So, how can you tell you’ve been targeted before it’s too late? This article will give you a glimpse at the scope of the problem. We’ll also provide you with the top 20 fraud red flags to watch out for this year, and provide some tips to help you stop attacks.
Watch for These Fraud Red Flags to Stop Criminal Attacks & Keep Your Business Safe
All card payments are prone to fraud. But… not equally so.
It’s widely known that card-not-present (CNP) transactions experience elevated friendly fraud and third-party fraud risks when compared to their card-present counterparts. It’s estimated that, as of 2024, CNP fraud comprises 74% of all payment card fraud.
Also, while fraud risks span the globe, attacks are concentrated in well-heeled geographies, at least by volume. Data from Juniper Research reveals that 42% of eCommerce fraud takes place in the US.
47% of merchants believe fraud is inevitable, while 20% think it costs too much to control. Of course, both these beliefs are incorrect.
Preventing chargebacks caused by card-not-present fraud is vital to protect your bottom line. Where do you get started, though? Well, as the saying goes:
“An ounce of prevention is worth a pound of cure.”
- Benjamin Franklin
The best way to stop criminals is to familiarize yourself with the warning signs of fraud. Once you do this, you can deploy the right solutions to stop fraudsters before they can pull off an attack.
To spot potential credit card fraud, experts have identified specific fraud red flags that may give merchants cause for suspicion. By themselves, none of these warning signs necessarily point to a problem. Large purchases, for example, are not necessarily signs of a full-scale fraud issue, but at the same time, it's critical that you recognize the potential events warranting further investigation.
20 Most Common Fraud Red Flags
At Chargebacks911, we’ve identified dozens of potential fraud red flags. Some are less common, while others tend to pop up over and over again.
Below, we’ve compiled a roundup of the top 20 fraud warning signs to watch for in 2025:
New Customer Orders
The Problem:
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.
The Solution
Subject new customers to an application and identity verification processes before allowing them to make purchases. To reduce friction, though, you can keep their card information on file so that they can bypass screening for subsequent transactions.
Larger-Than-Expected Orders
The Problem:
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.
The Solution:
If a buyer places an order beyond a certain dollar amount, or if they have items in their cart that you’ve identified as high-risk based on data from past chargeback reports, consider subjecting them to a multi-factor authentication challenge.
Repetitive Orders
The Problem:
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.
The Solution:
Block users who attempt to make identical orders in quick succession, and deploy automated fraud detection and decisioning systems that monitor, detect, and flag suspicious purchases.
Orders of Big-Ticket Items
The Problem:
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.
The Solution:
Set up automatic alerts that notify you of transactions exceeding your average order volume or dollar amount. As a precaution, manually review all big-ticket transactions and examine the customer’s purchase history, and request additional verification to confirm a buyer’s identity before approving the order.
Orders raising red flags? Take action today to stop fraud attacks.
Different Cards, Same Shipping Address
The Problem:
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.
The Solution:
Contact the cardholder to see if they are encountering payment issues. Review the buyer’s account’s shipping history. Use both address verification services and velocity limits to check for fraud signs, such as mismatched billing and shipping addresses or a high number of transactions within a short period, respectively.
Same Account, Different Shipping Address
The Problem:
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.
The Solution:
Use address verification services to compare the billing address provided by the buyer with the one of file with the issuer. Or, call the customer to confirm whether the change in shipping address is deliberate. For instance, if they’re purchasing a gift for someone located elsewhere. You can also ask for proof of identification to verify the buyer’s identity and address.
Different but Similar Card Number
The Problem:
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.
The Solution:
Use fraud monitoring systems such as geolocation technology to determine where the card is being. And, machine learning tools to detect anomalies, including checkout attempts in suspiciously rapid succession. You can also deploy card testing detection solutions that can monitor transactions in real-time and block suspected card testing.
Different Cards, Same IP Address
The Problem:
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.
The Solution:
Use device fingerprinting technology to flag orders that originate from a single IP address but involve different cards. Next, retrieve the location the purchase was made from, reach out to the buyer to confirm their identity, and block suspicious IP addresses as a precautionary measure.
Multiple Cards Used for One Order
The Problem:
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.
The Solution:
Check card verification values before processing a transaction. If you come across an order made using multiple cards, flag it for manual review. Alternatively you can limit the number of cards that can be used for split payments. Reach out to the buyer to try to see why they’re paying with multiple cards. Sometimes, it’s a fraudster… other times, maybe they’re just credit limit constrained.
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.
The Solution:
Flag low-value transactions initiated immediately after a failed high-value transaction for manual review. Check the buyer’s transaction history, especially their chargeback records, before deciding on whether or not to let the transaction proceed.
Guessing the Expiration Date
The Problem:
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.
The Solution:
Use AI tools that can detect and automatically block several mismatched expiration date attempts. Request proof of card ownership or deploy two-factor authentication before allowing further checkout attempts.
Problems Supplying Personal Information
The Problem:
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.
The Solution:
If a buyer can’t supply basic personal information, simply block the transaction altogether. If your “customer” can’t remember their own address or full name, then they have bigger problems than a single declined transaction.
Typos, Spelling Errors, or Using All-Caps
The Problem:
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.
The Solution:
Watch for spelling errors or typos in the information submitted by a potential buyer. Cross-reference the details against data on file, if you have any. If you find too many inconsistencies, flag the transaction for further review or block the buyer from making future purchases.
New threats emerge every day. Make sure your business is future-proofed.
Did You Know?
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.
Repeated Inquiries About Shipping
The Problem:
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.
The Solution:
Got a buyer that is constantly making inquiries about the delivery status of their purchase? Review theirtransaction history — especially their shipping records and delivery details — for signs of potentially fraudulent behavior.
Not Concerned About Shipping Prices
The Problem:
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.
The Solution:
If a buyermakes a high-value purchase and isn’t worried about shipping costs, double-check their billing information using AVS to ensure it aligns with the payment information on file with the issuer. Review their transaction history and see if they previously opted for rush shipping. If the buyer’s behavior appears inconsistent with past purchases, that person may not be a legitimate buyer at all.
International Shipping
The 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.
The Solution:
Carefully verify the specifics of each international purchase and pay extra attention if the purchase is made from a high fraud-risk location. Confirm if the customer’s name is on a sanctions list, or request additional verification. Subject all international orders to multi-factor authentication challenges at checkout, and block the purchase if verification attempts fail.
In-Store Pickup
The Problem:
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.
The Solution:
Ask to see identification before allowing anyone to pick up an item in-store, and have all recipients sign a delivery pick up form. Store a copy of the identification document or pick-up form; this could be useful evidence in the even you need to engage in representment.
No Concern for Company Policies
The Problem:
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.
The Solution:
Legitimate buyers will usually ask questions before making purchases, especially large ones. If a buyer rapidly makes a high-value purchase without contacting you for more information first, that could be a bad sign. Examine if the product in the buyer’s cart is prone to chargebacks and, if so, consider canceling the transaction.
Using the Deaf-Relay System
The Problem:
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.
The Solution:
Request additional verification documents from the buyer. Or, enable multi-factor authentication before processing over-the-phone transactions. Block the caller if you suspect foul play.
Indifference to Specifics
The Problem:
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.
The Solution:
Interrogate the buyer politely, ask personal questions to verify their identity, require multi-factor authentication, and err on the side of canceling a transaction if the buyer appears illegitimate.
Any number or combination of these common fraud indicators should be investigated thoroughly whenever possible. Thankfully, with the right combination of fraud tools in place, many attacks can be thwarted before they ever impact your bottom line.
Remember: half the fight against fraud lies in detection. However, not every form of fraud gives you a hint in advance of an attack.
Some fraud occurs after a transaction has been completed. To make matters worse, these attacks aren’t carried out by a hardened cybercriminal or practiced fraudster. Instead, they’re committed by otherwise legitimate and trustworthy customers.
Did You Know?
Friendly fraud is by far the single biggest fraud threat currently facing merchants today. According to the 2024 Chargeback Field Report, roughly one-third of surveyed merchants say that friendly fraud is a significant concern… as it should be. 72% of merchants reported an increase in friendly fraud attacks in the preceding three years.
To make matters worse, friendly fraud is far more difficult to detect than third-party criminal fraud. In fact, 30.4% of the merchants surveyed for the Chargeback Field Report say that identifying friendly fraud chargeback cases is their biggest chargeback management challenge.
How Do You Fight Fraud When There Are No Red Flags To Spot?
It’s alarming to encounter a fraud red flag. But, it’s also a blessing in disguise; it means that you can see and detect fraud before it does you any more harm.
Some types of fraud, however, don’t come with many of the usual fraud warning signs. For example, a buyer with no previous history of filing chargebacks against you can make a run-of-the-mill purchase, and then hit you with an invalid dispute weeks or months later.
That’s the unfortunate reality for many cases of first-party fraud. And, it’s why these attacks are particularly challenging to fight.
That doesn’t mean stopping friendly fraud is impossible, though. With the right tools, data, and integrations, you can combat all types of chargebacks (friendly fraud included).
At Chargebacks911®, our dual-layered prevention and representment solution can help you tackle difficult-to-detect forms of post-transactional fraud, such as first-party misuse, friendly fraud, and even aggressive forms of chargeback abuse like cyber shoplifting.
Eager to protect your revenue from fraudsters and lower your chargeback ratio? Reach out to us today for a free, no-obligation ROI analysis today.
FAQs
What are the general fraud indicators?
Some of the most common fraud red flags include larger-than-normal orders, repetitive small orders, the same account but different shipping address, and the same shipping address but different cards. Other general fraud indicators include high-value transactions, different shipping addresses on one account, multiple cards from one IP address, and problems supplying personal information.
Remember this as a rule of thumb: if something feels off… it probably is.
How do you identify eCommerce fraud?
Look for anything outside of the norm. This can be done using multiple fraud detection tools, all backed by fraud scoring.
Which is the most common incident of fraud in eCommerce?
Friendly fraud is a first-party, post-transaction attack committed by an otherwise legitimate customer. Merchants surveyed reported that friendly fraud was the number one threat facing their business in 2022.
What are the “red flags” for friendly fraud?
Unfortunately, there are no consistent warning signs for a friendly fraud attack. It's post-transactional, so there's limited things you can do to prevent it.
What is the most common method of identifying fraud?
The most common method of identifying fraud is the use of transaction monitoring solutions that use rules-based systems or machine learning techniques to detect and flag unusual transaction patterns.
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