Dealing With Credit Card Scams

First you should know  how credit card transactions are done:

  1. When a transaction is done the information is sent through the Visa or MasterCard Network to the card issuing bank which authorizes the transaction.
  2. The transaction is authorized based upon there not being any reported problem with the card and there is enough credit on the account.
  3. When you batch for the day the information is sent to the Acquirer (Chase) who bills the bank and puts the money into your account.
  4. When the cardholder gets his statement and complains to the bank or Visa/Mastercard they investigate.
  5. If the transaction is done with the card being present and pin entered the customer is not credited and you are not debited.
  6. If the card was not present and the bank and Visa are satisfied that it is fraud you are charged back for the transaction. This is the Bank and Visa/MasterCard taking this action Chase is just following their bidding.

When determining liability for a fraudulent transaction there is one very important factor “card present” or “card not present”. Any transaction including online where the card is not present and is not used with a terminal is “ card not present” that includes  online transactions where the customer enters their own credit card information.

If you are taking transactions over the phone or online you should verify the billing address and see that it matches the delivery address. If it does not you should investigate before releasing goods.

 

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