Reporting Fraud - Fraud Library

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So what do you do once fraud has occurred? As a merchant, who do you contact to report the crime? How do you try to prove your case to the issuing bank?

When you find that a fraudulent transaction has occurred you can report it in several ways. One of the ways is to use an online resource called the Internet Fraud Complaint Center (IFCC). The IFCC is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C).

The IFCC's mission is to address fraud committed over the Internet. For victims of Internet fraud, IFCC provides a convenient and easy-to-use reporting mechanism that alerts authorities of a suspected criminal or civil violation. For law enforcement and regulatory agencies at all levels, IFCC offers a central repository for complaints related to Internet fraud, works to quantify fraud patterns, and provides timely statistical data of current fraud trends.

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So what do you do once fraud has occurred?

What To Do If You Are Suspicious  

If you are suspicious about an order, try to verify the transaction by asking the customer for additional information. These requests should be made in a conversational tone so as not to arouse the customer's suspicions. If the customer balks or asks why the information is needed, simply say that you are trying to protect cardholders from the high cost of fraud.

If you are on the phone with the consumer, put them on hold and call your acquiring bank for a Code 10 authorization. A separate phone call to your authorization center asking for a Code 10 authorization lets the center know you have concerns about a transaction. Ask for the name of the financial institution on the front of the card. Separately confirm the order with the customer. Send a note to his/her billing address, rather than the “ship to” address. On shipping the goods make sure you ship them with a signature required.

For addresses in which goods have been shipped and stolen, report it to the postal inspector at the United Sates Postal Service, in the area the fraud has occurred. This is important as they track fraud by address, and may have had other reports for the same address. They may implement a sting operation and/or be able to help you in a prosecution.

For large cases, contact your local police, FBI or Secret Service resources to see about pursuing potential investigation. Don’t be surprised if your local law enforcement agency doesn’t jump in to help you. There are a lot of cases of fraud, and unless you have a substantial loss or proof of a larger ring that would catch the attention of broader investigations, they won’t be willing to get involved. Even if they find the culprit, unless the dollars involved are substantial, pursuing a prosecution may be difficult.

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