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Credit Report Disputes And Identity Theft: Boston Attorney Guidance – E-commerce has made it easier than ever for merchants and consumers to do business online. Unfortunately, cybercriminals and thieves can also steal without leaving their homes.
Credit card fraud has become somewhat of an epidemic. According to a recent report, 56% of Americans have been victims of online fraud.
Credit Report Disputes And Identity Theft: Boston Attorney Guidance
While improved hardware and EMV chip cards have helped reduce the risk of fraudulent transactions in physical store locations, online fraud has grown at an astronomical rate.
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Anyone with an eCommerce website should read this guide. If you also have a brick-and-mortar presence, you should also check out our merchant credit card processing fraud prevention resource.
Before you can stop online credit card fraud, you need to understand the different ways it can happen. These are some typical online scams you will see in the e-commerce industry.
Phishing occurs when a hacker uses someone else’s information online. This is also known as account takeover fraud.
These attacks work by convincing victims to voluntarily disclose secure information, such as login details for an email account or customer profile. This can give the thief access to stored payment information on various online shopping sites.
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For example, let’s say a customer orders something from your e-commerce website. Instead of returning it, they simply file a chargeback with their credit card company.
As the merchant, you lose the money, but the product stays with the customer. Sometimes this is an honest mistake, known as “friendly” cheating. But other times people will deliberately take advantage of the system.
So it’s common for thieves to buy something online with a stolen credit card, then return it with a card issued to themselves. This is a quick scam to get credits on their statements.
Before making very large purchases, it is common for criminals to test stolen credit card information by making a small purchase.
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If the transaction is processed, they will start making larger purchases with a valid card before the victim has a chance to realize what is happening.
Identity theft occurs when a criminal intentionally and illegally obtains someone’s personal information. They make online purchases under that person’s name, and the victim is stuck with the bill.
Banks and credit card companies have made it easy for fraud victims to dispute these transactions to get a full refund. The liability is usually transferred to the dealer. So you are out the money, as well as the cost of goods sold.
Advanced hackers redirect traffic from one website to another that looks exactly the same. If a customer does not recognize the redirect, they may unknowingly enter sensitive information (such as credit card details) on a fraudulent page.
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There are certain red flags that should tell you if a transaction is suspicious. Sometimes just one of these signs won’t be enough to assume it’s a scam. But if you see several red flags on one transaction, you should consider closing it.
Sometimes there are perfectly legitimate reasons why a billing address and shipping address don’t match. It is possible for a customer to just send a package to a friend or family member.
With that said, a thief will almost never send a package to the victim’s billing address. So a mismatched billing and shipping address is usually the first sign of potential fraud.
Of course, it is normal for people to order more than one of an item. But certain amounts should definitely raise a red flag.
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Unless it’s from one of your normal B2B accounts, most people aren’t buying 200 speakers or 500 pairs of headphones. These types of transactions will almost always be fraudulent.
If the average ticket order from your e-commerce site is $50 or $100, you should raise a few eyebrows if one person buys $5,000 worth of merchandise in a single order.
Before you start celebrating that big purchase, make sure you verify it’s not fraudulent before sending anything.
However, it is very suspicious if ten different orders go to the same address, and each order was paid with a different credit card.
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If the answer is never, and international orders start coming in out of nowhere, this could be a sign of credit card fraud. This is especially true if your business is not marketed anywhere outside of a local region.
According to a recent merchant survey, these are among the most effective tools for preventing fraud.
Not all of these will be necessary or realistic for an e-commerce website. For example, if you sell t-shirts online, you don’t need to run a credit check on your customers or put them through a two-factor phone verification process.
Consider developing a fraud scoring model, which will include various tools and methods to identify and prevent fraud. If a transaction has numerous red flags, it should be investigated as fraud.
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You don’t have the luxury of processing chip cards on EMV terminals, so it’s easier for cybercriminals to make fraudulent transactions using stolen credit card information on your website.
Understand the common signs of credit card fraud and implement the best practices I’ve listed above as prevention methods.
Before founding Merchant Cost Consulting, Colin worked in the payments industry for 3 years to gain an extensive knowledge of the ins and outs of the industry. During that time, Colin learned how deceptive the industry can be and wanted to do something about it. Before joining the payments industry in 2014, Colin played professional baseball for the Los Angeles Angels of Anaheim. Colin is from Waterford, CT and received his BA in business from Virginia Tech where he was a member of the varsity baseball team.
Merchant Cost Consulting is a cost reduction firm that helps businesses lower credit card processing fees on merchant services without disrupting their day-to-day operations. Being a victim of identity theft can be a surreal experience. You didn’t buy it, you didn’t borrow it, you didn’t rent it, and you were never in Albuquerque in the first place!
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It can also be extremely expensive and damaging to your financial future. Denied mortgages or car loans, predatory interest rates, maybe even a lost job opportunity because a potential employer was put off by your bad credit score. And trying to get the credit reporting bureaus like Experian, Transunion and Equifax to correct the record so you can get your life back on track is often extremely difficult.
In the words of one victim of identity theft, “When you are a victim of identity theft, you are put in the position of having to prove who you are to a greater extent than the criminal had to in order to get goods and services. You are treated as if you are trying to get out to pay for something.”
It is not unusual to spend hours on the phone being passed back and forth between different departments, nor to submit all the information you have been asked to provide only to have weeks or, in some cases, even months later not hearing back from them.
Too often, the credit reporting bureaus just don’t seem to care much about getting it right. Your financial future may be hanging in the balance, but to them you’re just a single person who doesn’t have much power.
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But you have options, and you have a way to get the credit bureaus to take your claim seriously.
In 1970, the US Congress passed a law designed to protect consumers from misinformation on their credit reports called the Fair Credit Reporting Act, or FCRA. Haven’t heard of it? Don’t feel bad, many Americans haven’t. But it’s real, and it can help you.
The top two are the keys here. This means that credit reporting bureaus have a legal obligation to listen and carefully evaluate your claim that their information is incorrect. And if they don’t, you have the right to sue them.
If you’re at the end of your rope and haven’t heard back from those agencies weeks or months after trying to correct your record, now you know: You can sue them.
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Can’t afford a lawyer? You can still sue the credit bureaus. Morgan & Morgan’s FCRA attorneys won’t charge you a dime until they win for you. Contact them today for your free, no-obligation case review.
More and more Americans are grasping at the power this law gives to take back control of their lives. According to Law360, in 2009 there were only 1,403 FCRA lawsuits filed nationwide; by 2018, that number was 3,582. And there have been some very large verdicts and settlements in that time: a $60 million verdict against Transunion and a $3 million settlement with Equifax.
Having to file a lawsuit to reclaim your identity isn’t anyone’s idea of a good time, but until the system that makes it so easy for criminals to ruin your life is fixed, renting An FCRA attorney may be their best bet. An FCRA lawsuit can cause the credit bureaus to take your case more seriously, which can lead to a faster resolution to your problems.
And while you can’t get back the hours and hours you spent calling and emailing and digging up old receipts and the money
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