Digitalization indeed has positively influenced businesses and regular internet customers. From purchasing a product to paying for it and launching a business to generating revenue from it. However, as each coin has two sides, so does this. 

While digitalization has made almost anything possible with a just a click away approach, it has also increased security threats. After all, digitalization includes exchanging of data, and with an exchange in data comes data breaches. These security threats are especially prominent in industries dealing with customers’ financial data. 

Many e-commerce stores and businesses are offering ample payment gateways. One can pay via an e-wallet or your debit/credit card. However, this ease also risks losing thousands of dollars if you are not alert. So even as a business, you risk being a victim of some form of debit/credit card scam at some point in your financial life. 

Card-not-present (CNP) is one such form of a credit card scam. We will further your understanding of card-not-present fraud as we progress in the article and learn a few steps to take if you find yourself a victim of CNP fraud as a business. Before jumping into the steps, let’s understand what CNP fraud is, how the thieves hijack your credit card, and some preventive measures you can take. 

What is a CNP fraud? 

Simply put–a CNP fraud is a credit card transaction/scam without the card holders’ consent. So the actual cardholder will have no clue when a purchase is made using their card. 

What makes this fraud easy is that all the criminal needs are:

• The victim’s credit card number.
• CVV code (the three-digit number found on the back of the card).
• Its expiration date. 

Well, from the points mentioned above, it is easy to be a victim of CNP fraud. However, there are ways you can prevent it. Let’s briefly look at a few of them. 

Note: If you are based in India, card-not-present fraud is less likely to happen due to OTP service. A transaction is possible only after the registered user enters the OTP in the country. While if you are based in any other country, the chances of being a victim of CNP fraud are high since there is no OTP service. 

Preventive measures to protect your business from CNP fraud 

• It would help if you collected as much customer info as you can in a way that doesn’t hurt your conversion rates.
• Use the latest data encryption and security methods to ensure you or your business are not victims of this fraud. 
• You should also keep track of the number of logins from the same IP within a short span. 
• Watch out for extremely large and extremely small purchases 
• Use analytical tools to streamline the customer authentication process 
• Add a few more steps to authenticate the customer 

The steps to prevent the fraud and those to take once you are a victim, are differet. Follwoing the steps mentioned above will help you prevent the fraud. However, if you are already a victim, you need to take different steps. Let us take a look at three such steps. 

3 Steps to take if you are a victim of CNP fraud 

Well, prevention is always better than cure. However, if you still have fallen a victim to this fraud, below-mentioned are a few steps to take. 

• Immediately lock the card 

Once you’ve realized you might have fallen victim to the fraud, immediately use the card’s lock feature to lock it. Many credit card companies also call this feature as freeze. You can immediately lock the card using the company’s mobile application or by logging in to your online account. 

• Report it as soon as you can 

The sooner you report the fraud, the quicker you can stop unauthenticated spending from your card. Making too many frequent or unauthorized purchases badly affects your credit score and limits the liability for any fraudulent charges. 

So if you think you may be a victim of CNP fraund, you can report it by: 

Contacting your card company

Your card must have a toll-free number on the back of it. If you don’t find it there, you can even go to the company’s website and contact them via email or by issuing a letter. 

Reach out to a credit bureau 

You can even set up a credit freeze or a fraud alert. This will make it hard for anyone to alter the details of you card account or even to open a new account. 

You can reach out to the credit bureau any time you notice a suspicious activity in your account. You may lock your card; however, freezing it ensures better protection. It is very easy to put a credit freeze in place. It involves getting a PIN (Personal Identification Number) or a password required to lift the freeze on your credit report. 

The other alternative is to visit the bureau’s official website. They have a credit freeze page on the site which you can visit to reverse the freeze. 

File an FTC complaint

Approaching the FTC (Federal Trade Commission) is a safe way to go about it. They will redirect your complaint to the designated authorities and provide resources to get you back on track. Usually, if you file an FTC complaint, you won’t have to file a police report. 

Also, if your complaint gets verifitied by the Fair Credit Billing, you will not be charged more than 50 dollars regardless of the number of charges made on your card. 

• Check your statements and online shopping accounts 

Today, almost every ecommerce store saves customers’ card information for future purchases. While credit card companies ensure they follow the “zero liability policy” to protect your card details, it is important to keep a tab on your online shopping accounts and check if they haven’t been compromised. Make sure to remove the compromised card if your online shopping account is no longer secure and change the password too.

You will also want to keep monitoring your credit card statements atleast for a few months after the scam. Fraudulent charges can keep showing up in your statements even mnths after the card was compromised.  

Wrapping up steps to take when you are a CNP fraud victim

Online payments are riskier since there is no face-to-face interaction between two parties. In-person transactions are safe since they can be authenticated physically. While authenticating a person online gets tricky. We must accept that credit card frauds and cloud security threats are here to stay as long as there is data. 

However, you definitely can take preventive measures to protect yourself. Hackers may still find a way to make you a victim even after you take solid preventive steps. In such a scenario, follow the steps mentioned in this article and take extra precautions the next time you pay via credit card. 

Also Read: Fraud Risk Management: A Guide To Good Practice