We have noticed a marked surge in ‘card not present’ fraud. What are the key things we should be doing to prevent this?

Online fraudsters get cleverer by the year. They are now savvy enough to have nearly all the required customer data at their fingertips and exploit that with much success.

Often, they will have obtained a cardholder’s name, phone number, billing address, security code and will probably have set up a specific email address with the cardholders’ name, which makes an online transaction look authentic.

Paul Simms, fraud expert at fraud screening company 3rd Man, says there are subtle signs retailers can watch out for that may flag up suspicious transactions. These include misspelt names in email addresses, or the specific product order in question. For instance, an order for 20 iPods deserves closer inspection.

However, because of the sheer scale of online fraud and the intelligence of those orchestrating it, it comes as little surprise that retailers often do not have the resources within their organisations to detect enough of these criminals.

Simms says the solution lacks a community approach. In other words, information about detected fraudsters should be shared, so that when the same criminal visits other websites, the transaction is automatically flagged up. For that reason, retailers’ use of third party screening companies is a popular solution because they are able to monitor millions of transactions across multiple organisations.

Despite the prevalence of online fraud, there is some good news. Simms says: “Attempted fraud is going up, but actual fraud is going down. Retailers are getting better at tackling this.”