Indicators of Potential Credit Card Fraud

Best Indicators of Fraud for Card-Not-Present Transactions

Credit card fraud is a threat to all card-not-present merchants. Fraudsters use stolen credit card information and complicated technology to scam merchants out of both products and profits. But merchants can be educated on the indicators of fraud.

Credit Card Fraud is On the Rise

Recent studies have revealed some truly terrifying information.


The average merchant suffered 133 fraudulent transactions per month.


Each fraudulent transaction costs, on average, $114.


Merchants who accept payments from multiple channels report 42% of fraud is associated with ecommerce.


Merchants lose 1.36% of revenue to fraud annually.


Online merchants lose $3.08 for every dollar of fraud.


Mobile commerce is tied to 20% of fraudulent transactions, but only 14% of purchases happened on mobile devices.

Perhaps more alarming is the fact that 47% of merchants believe fraud is inevitable, and 20% think it costs too much to control the fraud.

It is clear that preventing chargebacks caused by card-not-present fraud is vital to the retention of profits, but many merchants don’t know how to go about reducing the risk of criminal activity.

In order to prevent chargebacks, you must note the warning signs and look out for every possible angle that fraudsters can use to slip through the cracks. By identifying fraud red flags (indicators of fraud), merchants can take the necessary steps to prevent these transactions from happening.

Most Common Indicators of Fraud

Do you know the indicators of fraud? Successfully identifying potential cases of credit card fraud means merchants are able to prevent the resulting chargebacks.

  • New customers: Fraudsters are always on the lookout for a new mark. Though gaining new customers is not one of the definitive indicators of fraud.
  • Large purchases: You probably have an average ticket price. Any transactions that are higher than normal should be considered suspicious. Criminals only have a small window in which the stolen card number can be used without detection. So, they’ll want to buy as much as they can.
  • Repetitive orders: If you come across an order that has lots of the same item but in different colors or sizes, proceed with caution.
  • Orders with big ticket items: Criminals only have a limited amount of time to earn a few extra bucks. They’ll go for the items with the biggest resale earning potential.
  • Orders with expensive shipping: The criminal doesn’t care about the extra expense of rush shipping!
  • Lots of orders placed on similar card numbers: A thief might have scraped a list of credit card accounts and placed orders on each card.
  • Multiple orders shipped to the same address but placed on different cards: Thieves could have access to multiple cards, using each before the scam is detected.
  • Multiple orders shipped to different address, but placed on the same account: Some criminals have been known to share the card number with friends (or order for them).
  • Multiple orders coming from the same IP address: Two different cards used in the same house could be normal activity. But, more than that should be considered suspicious.
  • Trying again at a lower amount: When they receive notice that their purchase was declined, fraudsters will try making a purchase at a lower cost to see if they can access money from the account.
  • Entering a new expiration date: For most card-not-present purchases, customers must provide the credit card expiration date. If the initial expiration date is wrong, and the customer tries again with a new one, there’s a good chance the card is not in his/her possession.
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  • Difficulty supplying personal information: Customers that have trouble supplying addresses-- and extra information asked when purchasing over the phone-- may not be the cardholder at all. A real customer wouldn't find it difficult to provide these details.
  • Repeatedly inquiring about shipping: When customers repeatedly request updates about the shipping process or seem overly concerned about shipping overseas, they may be worried the products won't leave your warehouse before the fraud is detected.
  • Same large order with multiple payment cards: If customers request to use several different methods of payment on one large order, they could be committing fraud. Many fraudsters do not know how much money they can access with each stolen card. Trying to use many different cards to place the same order, may be and indicator that they're checking to see which one will be approved.
  • Disinterest with the price: Fraudsters aren’t spending their own money. They aren’t worried about how much they’re spending or what they’re spending it on. A phone order placed by someone with little regard for the price could be a fraudster.
  • Not worrying about company policies: Fraudsters aren’t worried about the quality or accuracy of the purchase, they just want something for free. If someone places major orders with no regard for return or exchange policies, warranties, insurance, or rebates, he could be trying to fly under the radar.
  • Using the deaf relay system: If customers place orders over the phone using a deaf relay system, they are not using their own voice. This could be because they are not who they are claiming to be (for example, a man placing an order on a woman’s card). Be overly cautious when accepting these sales. Request personal information to prove legitimacy.

If anything sticks out as a red flag when a customer is making a purchase, request additional information or call to verify the purchase. Don’t worry about annoying the customer; a true customer will appreciate the extra protection.

Is it Time to Get Help?

If your merchant account, and ultimately the longevity of your business is at stake, preventing fraud takes on a new sense of urgency.

Monica Eaton-Cardone

Co-Founder and COO

Because eCommerce technologies are constantly evolving, fraudsters are always on the lookout for new ways to part merchants from their profits. That means you’ll constantly be threatened by new, innovative, and unprecedented fraud attempts. While carefully examining each transaction can help prevent fraud, a determined criminal can usually find a way to get past your guard.

Carefully inspecting each transaction for signs of fraud can help reduce, but not eliminate, the risk of chargebacks. Fraud detection must be incorporated into an extensive chargeback prevention strategy.

It might be time to seek professional help. Not only does Chargebacks911® take a careful look at your current business practices and policies, examining more than 100 loopholes criminals commonly exploit, we also provide an advanced alert system.

When victims of fraud contact the issuer for a chargeback, the bank will alert our clients to the situation. Rather than suffer the effects of a chargeback, our clients are offered the chance to refund the purchase, thereby avoiding an elevated chargeback ratio and eliminating fees.

Let Chargebacks911 put a stop to credit card fraud. Contact us today. We’ll tell you exactly how much you can save by taking advantage of our services.

Prevent Chargebacks.

Fight Fraud.

Recover Revenue.


2013 LexisNexis® Risk Solutions True Cost of Fraud Study

2014 LexisNexis® Risk Solutions True Cost of Fraud Study

LexisNexis® Risk Solutions press release

2018    Friendly Fraud    

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