Merchant Account News Alert: Chargebacks & False Positives Flooding Merchants in 2017

34a06998b3dd45e718c519ae53919e5a (1)

Merchant Account News Alert: Chargebacks & False Positives Flooding Merchants in 2017

One of the chief causes of lost revenue for online merchants is chargebacks due to fraud, and the problem seems to be getting worse. Criminals that steal credit card information are upgrading their tactics through the use of sophisticated automated testing programs. Credit Card Fraud rings are buying thousands of stolen credit card accounts at a time with the goal of purchasing items online that are easy to resell. However, by the time they purchase the stolen accounts many of the credit card accounts are already shut down or will be in a brief period of time. To determine which stolen credit cards are still active, the thieves test the credit card information by attempting to make small dollar purchases online. If they find that the credit card works, they then make a large purchase using the stolen information.

Previously these credit card fraud rings would manually test each stolen account limiting the number of credit cards they could test at any time and consequently limiting the number of purchases, large or small that could be made. However, as reported by digitaltransactions.net credit card rings have begun to create automated programs that can test thousands of credit cards in a brief period. These testing programs employ bots that can perform credit card testing tasks at lightning speeds. In only minutes they bots can make hundreds of credit purchases online.

The explosion of testing is becoming a nightmare for online merchants as it is leading to an increase in chargebacks. These chargebacks cost business owners brand damage, increase the business’s interchange fee and leads to lost revenue. Even charities are becoming common victims to chargebacks from testing since charities tend to have fewer fraud detection defenses implemented.

With false positive purchases in the United States costing the US economy $264 billion in 2016 alone, it is essential that online merchants in Canada and around the world work with their merchant account providers to discuss strategies to prevent fraudulent online purchases. Credit card fraud rings are working hard and becoming more sophisticated in order to steal from merchants and their customers. Therefore, you need to make sure your credit card processor is working even harder to protect you and your businesses from these chargeback attacks.

#creditcardmerchantservices #creditcardprocessor #creditcardprocessingcanada #paymentprocessingcanada