About

Credit card fraud remains a significant challenge for online merchants, particularly in the United States. In 2023, consumers reported losing more than $10 billion to fraud, marking a 14% increase over reported losses in 2022 [Federal Trade Commission]. Specifically, credit card fraud was the most reported type of identity theft in 2023, with 416,582 reports made to the Federal Trade Commission (FTC) [Upgraded Points].

The United States continues to be the most credit fraud-prone country globally, accounting for 46% of global credit card fraud losses [Merchant Cost Consulting]. This disproportionate share underscores the heightened risk faced by U.S. merchants and consumers.

The financial impact of credit card fraud is projected to escalate, with global losses expected to reach $43.47 billion by 2028. [Techopedia] This trend highlights the critical importance of implementing robust fraud prevention measures.

Failing to address credit card fraud can lead to substantial financial losses, damage to brand reputation, and erosion of customer trust. Merchants may also face increased operational costs due to chargebacks and fraud-related disputes. Moreover, businesses that do not prioritize fraud mitigation may become more attractive targets for cybercriminals, further exacerbating the problem.

Best Practices

Here are some best practices for merchants to prevent credit card fraud:

• Use the Address Verification System (AVS) to verify billing addresses.

• Require card security codes such as CVC2 and CVV2 for every purchase.

• Enable 3D Secure 2.0, via Paay.co

• Maintain PCI compliance across all your point-of-sale (POS) systems.

• Consider integrating IPQualityScore

• Consider integrating Kount

• Consider integrating Eye4Fraud

• Employ as many of the rules that are applicable in the UltraCart Fraud Prevention configuration page.
  (*Use the ‘Process Payment and Review’ action for these rules where possible.)
  * Some suggested rules (for complete rules available see: Fraud Prevention :

  • In ‘Address Rules (Premium)' section: ‘If fraud score exceeds __’

  • In 'Address Rules' section: ‘If billing address does not match shipping’

  • In ‘Payment Rules’ section: ‘If user changes credit card number this many times for attempted transactions __’

  • In ‘IP/Subnet Rules’ section: ‘If IP country does not match bill to/ship to country’