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New Zealand Businesses Must Stay Vigilant Against Credit Card Fraud
Credit card fraud is a significant risk for any New Zealand business that accepts credit cards, with fraudulent transactions having a substantial financial impact on affected companies. As busy periods like Black Friday and Christmas approach, it’s crucial for businesses to remain vigilant year-round to prevent falling victim to scams.
Understanding the Risks
One of the most common types of credit and debit card fraud is identity theft, where an individual steals someone else’s card or takes a lost card and makes unauthorized purchases. It can be challenging to identify and prevent this type of fraud, especially with the rise of “tap and go” technology.
Staff Play a Crucial Role
Businesses and their staff must work together as the first line of defense against credit card fraud. By being aware of unusual behavior or spending patterns, staff can help identify potential fraudulent activity.
Red Flags to Watch Out For
• A customer making an unusually large purchase without showing concern for price, color, or size. • Refund requests on credit and debit card transactions via EFTPOS terminals. • Employees processing refunds to their own debt and/or credit cards.
Protecting Your Business
To minimize the risk of credit card fraud, businesses should:
- Closely monitor all refunds, ensuring they correspond to legitimate sales and are refunded back to the original payment card.
- Pay particular attention to large refund amounts or an increase in refund transactions.
- Limit access to merchant numbers and restrict access to refund cards.
Card Not Present Transactions
Internet, mail, and phone order transactions, known as “card not present” transactions, are a higher risk for fraud due to the anonymity they provide. To reduce this risk, businesses should:
- Implement a standard credit card transaction checklist for all staff.
- Develop and maintain a secure customer database to track buying patterns and identify changes in behavior.
Additional Security Measures
• Advertise that you will prosecute fraudulent activity on your website. • Discuss additional security measures with service providers or IT experts to help redevelop the website payment page.
Protecting Your Business Against Scams and Fraud
Scams and fraud continue to be a significant risk for New Zealand businesses. To stay secure, businesses should:
- Join CERT NZ, a government authority on cyber security, to learn about common types of fraud and scams.
- Take simple actionable steps to keep your business secure.
By following these measures, New Zealand businesses can reduce the risk of credit card fraud and protect themselves against scams and fraudulent activity.