Banning Fraudsters and Preventing Chargebacks

6 Tips for Banning Known Fraudsters

Chargeback fraud is never fun. There is one hidden perk, however, even if it is pretty insignificant: once you know individuals have engaged in fraudulent activities you can prevent them from victimizing you again in the future.

These six simple practices can drastically reduce your risk of future fraud.

1. Create a Blacklist

Work with your merchant processor to create a blacklist. Criminals on the blacklist won’t be able to process orders with you again. You can ban someone based on their name or IP address. If you want, you can even ban an entire country.

You don’t have to wait until criminals attack. You could take a proactive approach to fraud prevention and ban all customers from countries that are known for elevated levels of criminal activities.

Internet Retailer identified the following as the top five riskiest nations for ecommerce fraud in 2015:

Nation % of Transactions Considered Fraudulent
Indonesia 35%
Venezuela 33%
South Africa 25%
Brazil 11%
Romania 10%

It should be noted that a determined fraudster can bypass blacklist restrictions. For example, the criminal could use a different email address to place the order or shop on a public computer with a different IP address.

Also, remember that a blacklist is a powerful tool, one you shouldn’t use frivolously. Automated chargeback management isn’t nearly as effective as a personal approach. Universally banning potential fraudsters means you also ban potential customers.

Computers Don't Commit Fraud. People Do.

Discover why any effective fraud detection/chargeback prevention plan requires direct human involvement.


Contact Chargebacks911® before implementing a blacklist. Chargebacks911® is the only service provider that has replaced error-prone full automation with human forensics and machine learning.  This enables us to provide chargeback prevention services that don’t increase declines or generate false positives. If you’ve already started banning fraudsters, we can help you reduce your losses.

2. Create a Whitelist

You can also set up a whitelist. A whitelist is similar to a blacklist, only the practice is basically reversed. Rather than ban certain people, a whitelist blocks everyone and only allows a select population through. For example, you can ban everyone except customers in the US and Canada.

Internet Retailer identified the following as the five countries with the lowest fraud risk:

  • Denmark
  • New Zealand
  • Finland
  • Norway
  • Switzerland

Again, use this approach with caution, as automation without human oversight can lead to unforeseen problems. Your best option is to combine these automated solutions with human forensics to detect fraud. Contact Chargebacks911® today to learn how.

The State of Chargebacks 2018

Launched as a way of collecting and analyzing industry findings, the State of Chargebacks survey reflects the experiences of more than one thousand respondents in the card-not-present space. Download to learn the latest insights on fraud and chargeback management.

Free Download

 3. Set Velocity Limits

If fraudsters are in possession of a batch of stolen credit card numbers, they’ll want to make as many transactions as possible before their actions are detected.

Set a limit to how many purchases a person can make in a given time period from a single IP address. Even if criminals only have a single stolen credit card number, they’ll still want to make as many purchases as possible.

Naturally, big-ticket items offer the best resale potential with the quickest return. Even if you elect not to impose velocity limits, be on the lookout for customers attempting to make multiple big-ticket purchases in quick succession, especially if they use multiple cards with the same IP address.

Before We Go Any Farther…

Keep in mind that while velocity limits, blacklists and whitelists offer protection against chargebacks stemming from criminal fraud, less than 10% of fraud is actually criminal. The vast majority of chargebacks stem from merchant error and friendly fraud.

Contact Chargebacks911® today to create a comprehensive chargeback prevention plan that addresses all three sources of chargebacks: criminal fraud, merchant error, and friendly fraud.

Continuing to focus the majority of your attention on criminal fraud means:

  • You’re basing your management strategies on insufficient data. Very few of those supposedly “unauthorized transactions” are actually criminal fraud.
  • You’re implementing ineffective solutions that target the wrong problem. Criminal fraud prevention strategies won’t negate friendly fraud.

4. Detect Affiliate Fraud

Many online merchants rely on affiliate marketing to increase revenue. Unfortunately, the opportunity to increase sales comes with an elevated risk of fraud. Unsavory affiliates and publishers have devised plenty of creative ways to commit fraud.

Not only are merchants paying commissions to affiliates that haven’t earned the income, merchants are also losing revenue, paying steep fines, and jeopardizing their processing abilities because of the chargebacks associated with affiliate fraud.

Even if this fraud isn’t causing chargebacks, merchants are needlessly loosing revenue and jeopardizing their business’s longevity.

To ensure affiliate marketing remains a profitable venture, merchants need to carefully screen publishers and detect risks before they become liabilities.

Affiliate Fraud Shield™ is a unique fraud detection and prevention product created by Chargebacks911®. Our product is the only one on the market today that is able to identify and prevent affiliate fraud, a type of revenue-stealing activity that goes undetected with traditional fraud filters.

If you are using affiliate marketing to generate revenue but haven’t signed up for Affiliate Fraud Shield™, your chargeback rates could spike so suddenly and unexpectedly that your processing rights are revoked within a month.

If you are using affiliate marketing, contact Chargebacks911® today.

5. Use Other Fraud Detection Tools

Banning known fraudsters will help maintain more profits in the future. However, you can also ban fraudsters before they have the chance to steal from you.

There are several tools that can help detect and prevent fraud. Card-not-present merchants should take advantage of all of the following:

It is also wise to use fraud filters, but again, don’t implement automation without human analysis. Manual reviews and customized fraud filter rules can decrease false positives. Chargebacks911® is able to help with this.

Also, various issuing banks have join chargeback alert networks. These banks will “alert” the merchant when a transaction is disputed based on claims of criminal activity. Merchants have the chance to refund these customers before a chargeback is issued.

Alerts help prevent chargebacks, the accompanying fees, and an elevated chargeback-to-transaction ratio. Chargebacks911® offers the most comprehensive alerts management service on the market today.

6. Get Professional Help

While the above mentioned prevention tools and strategies will help in your efforts to ban fraudsters, they aren’t perfect. Fraud is committed by people, not automated technologies. Therefore, it is not surprising to learn a computer can’t fix a problem created by humans.

The most effective fraud detection and chargeback prevention approach relies on human involvement. At Chargebacks911®, we infuse expert human analysis with our own proprietary technologies to create the most effective chargeback and fraud management solutions available.

We are so confident in our ability to dramatically reduce your chargeback instances, we offer a 100% ROI guarantee on all of our services.

If banning fraudsters and maintaining revenue is your ultimate goal, let us help.

Prevent Chargebacks.

Fight Fraud.

Recover Revenue.

4425    Friendly Fraud    

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