May 2007

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Ten Tips to Help Reduce Fraud at your Business

As a merchant, it’s important to know what steps you need to take that may help reduce the risk of fraud at your business location. Review this list with your employees and keep it handy for easy reference.

Fraud associated with credit and debit cards is an ongoing issue that has received an increased amount of attention recently. Violators are finding news ways to duplicate cards, create false documentation and compromise security practices. To help avoid fraud and financial losses, all employees, including owners and managers, should be aware of what to look for when they are presented with cards and what to do if there is suspicion of fraud.

The following tips can help your business take steps towards fraud prevention and awareness:

1. Familiarize yourself and your employees about credit card security features. Credit cards have a number of security features that should be checked each time a card is presented for payment.
2. Follow proper card processing procedures. Always follow proper card processing procedures as outlined in your merchant agreement, manual(s), etc. Swipe the cards through a point-of-sale (POS) terminal whenever possible; ensure that the sales receipt is signed (and imprinted in the case of manual transactions) and that an authorization is obtained whenever one is required.
3. Be alert for suspicious customer behaviour. Watch for customers that randomly collect merchandise without regard to size, colour and price, or in the case of electronics, without regard to technical specifications or warranties.
4. Become aware of your POS environment. Check the POS area for additional terminals, wires or cables that don’t belong to the terminal. Look for signs (such as a small hole in the ceiling above your POS terminal or pinpad) that a pinhole camera may be being used to record customers entering their PIN numbers. Always conduct scans around your POS device.
5. Know your suppliers. If you use the services of third party companies or individuals for work – especially after hours (such as cleaners, electricians, painters), keep a record of when they come to your location and what they do. Ensure that these suppliers keep records of the names and have verified contact information of employees who are dispatched to your location.
6. Become aware of your POS equipment. Be sure to take a good look at your POS terminals and pinpads. Make note of their appearance, including any decals on the back of the devices. Do a regular check, and if anything changes, report it immediately to the company that supplies your devices.
7. Know your employees. Establish the full identity of your employees by obtaining full name, address, and telephone number. Be aware of any electronic-type devices that employees bring to work, such as a laptop computer with cable attachments. This is especially critical if your employees work alone and unsupervised for long periods of time – and they have access to your POS equipment.
8. Report any malfunctioning terminals or pinpads. As soon as you are aware of, or suspect that a terminal or pinpad is malfunctioning, report this immediately to the company that supplies your devices.
9. Being educated on fraud prevention can help to make a difference. Following these tips – and ensuring that your staff is well trained on fraud-prevention best practices can help to make a difference for your business. You may help reduce credit and debit card fraud which can result in a more positive image for your business and more confidence from your customers.
10. Get more information. The tips presented here are just a few of the ways you and your employees can help prevent fraud. To learn more, visit moneris.com/downloads.