Fraud Update

   American Express recommends that merchants take several steps to help prevent fraud. Though the suggestions are made for merchants who accept the company's charge card, these tips are good for merchants who accept other types of charge cards as well.
   ISOs can help strengthen their relationships with their own merchant customers by passing along the following suggestions, courtesy of American Express:

  • Make sure that the appropriate charge card is present for all in-person charge requests.
  • Merchants who have electronic authorization capabilities should always swipe the card through the POS terminal.
  • Always compare the account number on the front and back of the presented card with the account number on the printed receipt dispensed from your terminal or cash register.
  • Cardholder signature is required for all face-to-face transactions. The signature on the receipt must match the name on the front of the card and the signature on the back of the card. Instruct cashiers to inspect signatures. Many simply return the card to the presenter without ever looking at the signatures.
  • Expiration dates also need to be checked for in-person transactions and need to be recorded for other (telephone, Internet) transactions.
  • If processing the charge manually: Obtain an imprint of the card on a paper charge slip, then ask the card holder to sign the paper receipt and compare the signature.

   A new Internet site,, offers some other tips for fighting fraud. However, there is a monthly membership fee. The site also includes a database of credit card numbers. By entering their own credit card numbers into the database, users can find out whether others are trying to check the validity of their cards. To ensure the database isn't used by thieves to obtain "good" numbers, no expiration dates are included.
   Ingenico is touting its eN-Concert Signia as a secure and paperless solution to managing credit card receipts. Signia provides comprehensive signature and image document storage, retrieval and management, reducing the opportunity for receipt mishandling.
   Identity theft is the fastest growing major crime in the U.S. today, company officials point out. The U.S. Secret Service estimates that approximately 900,000 persons will be victims of identity theft this year. Not only is identity theft a major problem for individuals, but potentially for retailers who are often victims through mishandled merchant copies of bankcard receipts.
   "When the time comes to purge the oldest merchant copies, some retailers shred them while others place them in the dumpster," said Lloyd Baylard, Executive Vice President and General Manager of Ingenico's Retail Systems organization. "Although some merchants mask all but the last 4 digits of the card number on the customer copy, the full account number is printed on the merchant copy with the card expiration date and cardholder's name, making an attractive opportunity for identity theft. If the merchant copies are the compromised, the merchant can be held liable."
   In addition to the legal implications, the negative impact of one incidence of the compromising of a customer's private information can negate any retailer's advertising and brand awareness campaign, of which retailers annually spend hundreds of millions of dollars, Baylard added.