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  • #991987
    Anonymous
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    Can anyone advise us if insurance is available to protect us against credit card fraud. For example, we process a sale for $5000, provide the goods and services accordingly, and two months later find that the $5000 transaction was a fraud, and the banks then reverse the transaction and take their $5000 back. Can we insure to protect ourselves from that type of loss?

    #1184400
    John Debrincat
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    13MEDIA, post: 215487, member: 19808 wrote:
    Can anyone advise us if insurance is available to protect us against credit card fraud. For example, we process a sale for $5000, provide the goods and services accordingly, and two months later find that the $5000 transaction was a fraud, and the banks then reverse the transaction and take their $5000 back. Can we insure to protect ourselves from that type of loss?
    There is specific theft insurance for businesses and some cover online theft where goods are dispatched and not paid. You need to go ask a few insurance companies.

    However they will want to know how you mitigate the risk.

    So the starting point should be a better fraud protection program. If you take credit cards online then you should ask your gateway provider about anti-fraud. For examples eWAY offer an with Beagle Enterprise and SecurePay offer Fraudguard both work well. You can also implement 3D secure which will force a higher level of customer credentials and some banks offer a no charge back policy for 3D secure.

    You can also implement your own any fraud using something like Maxmind.

    Bottom line is to develop an anti-fraud set of policies that you work through with each order.

    John

    #1184401
    Anonymous
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    Thanks John. Another scenario we see is that we process a legitimate transaction, and months later the customer claims a ‘credit card charge-back’. If it’s an overseas chargeback we find that our bank (currently the NAB) have no way of fighting the claim and “always” find in favour of the customer and the charge-back goes against us. We have no come back against the customer. Can we insure against ‘fraud’ or ‘loss’ such as this ?

    Warren

    #1184402
    LucasArthur
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    Warren

    Are your questions anticipating this fraud, or is the fraud occurring? Not entirely sure on what you do, although if you are dealing with international sales and concerned about fraud for such large sums ($5k or more) have you considered direct payment into your account (ISBN etc)?

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1184403
    Anonymous
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    It has only happened on a small scale so far Jason, but as we ramp us business it is a real concern for us going forward. Direct payments are an option but we think an option that is clumsy and slow for our customers. We offer an ‘on-the-fly’ service, and we think the payment system needs to reflect that. Maybe we cap the ‘credit card’ payment we’ll accept, to at least minimise our risk, but ideally a sympathetic ear from our banks wouldn’t go astray either. When it comes to Merchant Services, everything seems to be in the banks favour first, customers favour second, and the business customer last.

    Warren

    #1184404
    John Debrincat
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    13MEDIA, post: 215493, member: 19808 wrote:
    Thanks John. Another scenario we see is that we process a legitimate transaction, and months later the customer claims a ‘credit card charge-back’. If it’s an overseas chargeback we find that our bank (currently the NAB) have no way of fighting the claim and “always” find in favour of the customer and the charge-back goes against us. We have no come back against the customer. Can we insure against ‘fraud’ or ‘loss’ such as this ?

    Warren
    Yes there are companies that insure against online fraud. I would start by asking your current insurer. Or you can find services like http://www.smartbusinessinsurance.com.au/cyber-insurance but I have not used them so it is not a reference just an example. But always double check the fine print.

    John

    #1184405
    LucasArthur
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    Hi Warren

    Ultimately, in the world of online payments and transactions ALL BUSINESS favours the consumer. This is necessary to create confidence in the consumers in dealing online and ultimately for the providers (banks) to earn their merchant fees (commissions) to move forward and maintain profitability.

    The onus always falls on the seller, so as John wisely suggests its best to implement as much security as possible including using the best merchant services – whomever they are.

    Must say though, if you are doing $5k on the fly transactions i am guessing it may also be in the high risk categories that banks may also have ongoing troubles with.. $5k on the fly is intriguing.

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1184406
    checkvault
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    You could try using BPAY using a credit card. In that case, credit card companies cannot simply go in and reverse the transaction under a fraud classification because in order for that transaction to have happened, the payer would have had to actually sign in to their banking portal and made the payment. Most of the frauds happen on online stores which have a credit card terminal where if a fraudster has a credit card of someone else can go in and make a purchase for them. But not BPAY Credit.

    So that’s one thing you can consider. If you have high risk transactions which are also quite large, instead of offering a direct payment terminal, offer them BPAY references to pay using their online banking platform.

    My company, CheckVault provides that service for our escrow clients, because becoming a BPAY merchant etc. costs money, whereas if you send payment requests through CheckVault (http://www.checkvault.com.au), we generate the payment references which our clients pass on their clients for getting secured. But we’ve employed this payment method since we understand the risks of reversal.

    Few things to consider here though. BPAY is a little less convenient than paying directly via credit card. But it completely takes out the risk of reversal. So if there are products which are expensive and you can’t afford to have a reversal on, then this is something you can consider offering.

    Let me know if you need any further help.

    #1184407
    @thetenderteam.com.au
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    You can insure against it, just contact an insurance broker, and choose an insurer that specialises/focuses in the area.

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