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How To Avoid Shady Credit Card Transactions And The Secret Of Successful IT Billing

Dec 12, 2014

There is only one way to be 100% percent certain that your IT business is avoiding 100% of all credit card fraud:

That method is to never accept credit cards.

Which is completely unrealistic.

Your managed service business will need to keep accepting credit cards, in order to accept payment from your IT clients. And as your MSP keeps running transactions via credit card, fraud will continue to be a serious problem that affects you and your clients.

Fortunately for you and your IT business, we have developed ways to minimize your payments processing risk and ultimately help you avoid falling prey to potential credit card fraudsters.

How to identify shady credit card transactions.

Credit card fraud is theft. Plain and simple. It is critically important to identify this fact up front and how this circumstance will affect your IT business, in order to avoid it.

When a person contacts your MSP and wants to order a larger-than-normal quantity of monitors or desktops computers, using a stolen credit card as payment, this person is committing credit card fraud and theft.

This type of crime damages two parties.

  1. The cardholder, with which a nefarious character is attempting to illegally use the cardholders stolen credit card.
  2. And the business that sold the products or services, aka your IT business.

The cardholder will lose credit card funds for the transaction, and the IT business will lose much more.

Your MSP will lose the transaction revenue, will be negatively impacted by chargeback fees, and potentially lose face with the IT hardware supplier.

Identify this ahead of time to run from the pain of this happening to your ITSP.

Repudiate the repugnant.

Preventing credit card fraud will require multiple methods for your MSP.

  • Your IT team will need to validate ID’s and signatures.
  • Your MSP billing team will need to ensure the cardholder’s account information matches the verification of the billing address, zip code and phone number that you are given.
  • We would highly recommend verifying the 3-digit codes from the back of the credit cards, as verification for both online and non-online transactions as part of your IT companies payments process.
  • Check your gut. If it walks like a duck and talks like a duck, it’s a duck. If your ITSP has received a large order from a new customer, which you’ve never done business with, we would strongly suggest that you do some extra checking before placing that hardware order.
  • And be specially cautious about collecting on international orders and be ready to call the credit card’s issuing bank to verify the credit card data that your IT company has received from the potential purchaser.

And there is Twitter.

And then there’s the social media aspect and online review sites to consider in the credit card fraud conversation.

It is extremely difficult for your IT company to manage comments and reviews left on Google places, Twitter or Facebook, from an angry cardholder, who’s stolen credit card number was mistakenly used by your MSP to process a fraudulent order.

As you can see below, these images are of other IT companies, who have their IT companies listed online.

If a specific cardholder had their credit card stolen, then charged by your IT company, they could easily leave a review for the whole world to see.

Prospective managed service clients would see this. Existing managed service clients would see this.

Everyone would see these potentially nasty comments.

(This IT company has zero negative reviews because they are awesome)
comments

Imagine when someone leaves a negative comment, for the entire world to see, how that can affect your IT business.

Take a look below at how easy it is to leave a negative comment, from a stolen credit cardholders perspective.
onlineReviews

Read these two articles about how to navigate negative online reviews.

Avoid swimming in a potential pitfall of bad online press, because your IT firm didn’t consider taking additional steps to avoid credit card fraud.

Common misconceptions.

IT business owners often believe that credit card fraud is caused by those who do not have authorization to use a credit cardholders data.

This is a huge misconception.

Some legitimate credit cardholders commit friendly fraud.

What is friendly fraud?

Friendly fraud is a kind of credit card transaction that occurs when a person places an order with their credit card, only to claim that he or she did not authorize the purchase in order to get a product for free.

Your ITSP can prevent this kind of fraud by obtaining delivery confirmation for shipped products. That way your IT shop is covered in case of someone making a legitimate purchase, only wanting to get something for free.

An ounce of prevention is worth a pound of cure. – Ben Franklin

It is well worth your time to make fighting credit card fraud a culture inside of your IT company.

This “cultural-norm” inside of your MSP will save you stress, time, money and headaches.

With a solid credit card fraud process in place, your MSP will avoid having transactions reversed (charge-backs), and losing the products from your supplier.

Do not perpetuate the theft issue inside your MSP.

If you are an MSP or IT company that wants to be educated on how to establish a payments prcoessing method to avoid looking like a credit-card-fraud-chump, schedule some time with us by clicking here.

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