Fraud can be a very emotional for most people, having something stolen from you is never a nice thing. Putting in place some simple logical business rules can reduce fraud risk and improve your emotional state.

People often either do nothing or put in place expensive and complex solutions. I think often a significant amount of fraud can be reduced by implementing some simple business rules. Here are the four business rules I would suggest you should implement:

Not all customers are the same

Your loyal customers are less likely to defraud you. The longer and more successful transactions history you have with a customer the less likely they are to create fraud.  Customer loyalty and good customer management can lead to lower fraud risk.

Many companies attempt up-front to collect vast amount of information about a customer to reducing risk but this often reduces sales not risk.

What Industry do you operate in?

There are some industries that are just more prone to fraud. If the product or service you sell can easily be turned into cash then there is a higher likelihood you will be a target. The pre-paid mobile recharge or computer equipment are classic industries for high levels of fraud.

Other sectors like non-profits are classic targets to check if a stolen credit cards are still valid, not good for your gateway charges.

Number of transactions

Sometimes things can be too good to be true. While it is good to get a big order or a lot of orders from a new customer, remember unless you really know the customer it maybe too good to be true.


Do all the customers’ details match?

Do the customers credit card details; address details and country IP address align. If the customer is using a U.S. credit card with a Sydney Australia address and sending the items to Hong Kong, maybe you should investigate the transaction further.

These simple rules aren’t rocket science but you would be amazed how many companies just don’t even think until it is too late. It does not take long to put these rules in place and is likely to be some of the most profitable time you spend.

Author: Richard Brock