Other Fraud

Protecting yourself against mail/telephone/Internet order fraud

A common type of fraud occurs when orders are placed to Canadian businesses from overseas. Typically, a merchant will receive a small initial order from an overseas customer by phone or email that establishes the relationship. A second order may follow requesting a much larger shipment of merchandise to an international address.

Be cautious if this situation arises, or if any international order involves the following:

  • Orders placed using numerous credit cards – transaction is split between several credit card numbers.
  • A shipping address that is different from the cardholder address, especially where the countries differ.
  • Unusually large quantities, high-value items or multiples of the same item – especially if they are to be shipped rush or overnight.
  • Requests for products that your business usually doesn’t sell.
  • Orders from an Internet address making use of free e-mail services, as there’s no billing relationship and often no audit trail or verification that the legitimate cardholder has opened the account.

If you are suspicious of an overseas order, follow the guidelines recommended for processing card-not-present transactions (pdf) and follow proper authorization procedures.

Be aware, however, that obtaining an authorization number only confirms that funds are available on the card. It does not confirm that the legitimate cardholder authorized the transaction, nor will it prevent a chargeback.