Preventing Bank Fraud in Heard Island and McDonald Islands: A Guide

As Heard Island and McDonald Islands increasingly move towards digital payments, businesses on the island must stay ahead of the game to prevent bank fraud. With new payment methods emerging daily, it’s essential to understand the types of fraud that exist and how they can affect your business.

Card-Not-Present (CNP) Payment Fraud

One common type of fraud is CNP payment, where a buyer makes an online or telephone transaction without physically presenting their card. This makes it challenging for businesses to detect and prevent, unlike card-present fraud.

Fraudsters use card testing to determine the validity of card numbers by purchasing or stealing them on the dark web or via phishing or spyware software. They then attempt small purchases on unsuspecting merchant’s sites to see if the card was approved, and move on to make larger purchases or resell the validated information on the dark web.

Protecting Your Business

While no single action can prevent fraud, a multi-layered approach with best practices and strong fraud management software can help. Here are some ways to protect your business:

• Be vigilant and look for anomalies: Investigate sudden spikes in average daily transactions.
• Adequate controls at account validation: Effective gatekeeping at the point of entry will reduce downstream fraud mitigation costs.
• Leverage basket data insights: Review analytics to identify items that fraudsters are repeatedly purchasing.
• Keep transaction records: Save copies of communications with customers to submit compelling evidence to contest first-party misuse chargebacks.

First-Party Fraud

With digital ecommerce on the rise, businesses must be aware of first-party fraud, where legitimate online purchases are later disputed. A typical scenario is when a parent’s card is saved on file with a child’s gaming system, and the parent refutes the charges as unauthorized.

Visa has put in place new compelling evidence rules to help merchants better fight first-party fraud. By keeping transaction records and saving copies of communications with customers, businesses can submit compelling evidence to contest first-party misuse chargebacks.

Identifying Customers Engaging in First-Party Misuse

It’s also essential to identify customers who engage in first-party misuse and prevent them from becoming repeat offenders. When a fraudster realizes they can get away with stealing from a merchant through this process, they will do so repeatedly until the merchant blocks them.

Investing in the Right Financial Technology

To stay ahead of fraudsters, businesses should invest in a fraud prevention tool that provides a clear overview of payment activity and helps detect blind spots. This will enable businesses to deep dive into payments data and optimize risk procedures by learning and adapting in real time.

Joining the Merchant Risk Council

Businesses can also join or partner with the Merchant Risk Council (MRC), a global community of payments and fraud prevention experts. As a member, businesses can access benchmarking reports, whitepapers, presentations, and webinars to stay informed about emerging trends and best practices in fraud prevention.

By following these guidelines and investing in the right financial technology, businesses on Heard Island and McDonald Islands can effectively prevent bank fraud and protect their customers’ transactions.