Reducing Credit Card Fraud and Increasing Data Security
Your customers expect you to keep their personal cardholder data safe – not an unreasonable expectation and merchants must take it seriously. Such protection requires merchants to make an ongoing commitment to human and monetary resources, including new technologies, stronger policies, and continuous diligence.
NOTE: The following list is a selection of suggestions only and is not intended to be an exhaustive or comprehensive list of data security tips.
Ensure your business is PCI DSS compliant
The Payment Card Industry (PCI) establishes and enforces security requirements for its constituents. Ongoing compliance with the PCI DSS (Data Security Standard) is the critical first step towards a successful data security program.
Review how data is used in your payments system
Before you can protect it, you must understand the ins and outs of the confidential data in your system:
What data you have
Where it resides
Who is accessing your data
When and how users access it
Limit use and storage of sensitive cardholder data within your system
Use your customers’ personal cardholder data only for applications directly pertaining to payments (transaction authentication and daily settlements, for example).
Minimize access to cardholders’ data
Limit access to customer information only to employees whose jobs require it. Do periodic spot checks to ensure procedures are being followed.
Conduct detailed background checks before you hire
Be selective about whom you hire; employees have the most access to your customer's data and systems. 41% of reported small business fraud in 2007 was committed by employees.1
Make any necessary system changes
You may have to update existing systems and implement new hardware and software, install firewalls, deploy data encryption technologies, implement data access controls and track and monitor access to data and networks.
Consider implementing a layered data security approach such as the combination of encryption and tokenization that will allow you flexibility and a solid defense.
Be on the lookout for signs of skimming
There has recently been a tremendous rise in card-skimming fraud at the point of sale. Skilled fraudsters can reconfigure a payment terminal by adding a skimming device in less than one minute. Payment terminals should be routinely inspected to ensure there have been no changes. Signs that your POS may have been compromised include:
Changes in the screws or seams of the payment terminals or unexplained scratches
A new or fake label or sticker that has been placed to hide a drill hole
Serial numbers that do not match between the payment terminal and the sticker
Pay attention to customers’ buying behaviors
Some things to look for include customers who:
Purchase a large amount of merchandise without regard to size, style, color, or price
Don’t ask questions on major purchases
Try to distract or rush you during the sale
Make purchases and leave the store but then return to make additional purchases
Make large purchases just after the store has opened or as the store is closing
Refuse free delivery for large items
Avoid falling victim to phishing scams
Never click on links that ask for your personal or account information even if the e-mail message appears to be from your payment processor or financial institution. Always type the service provider’s address directly into your Web browser’s address bar to access your account. If you believe you have been a victim of a phishing scam, change your online password immediately and contact your service provider.
Don’t stop now
Data security is an ongoing responsibility. Frequently audit your payment acceptance practices and systems. Fraudsters are always looking for vulnerabilities and consistently changing tactics to stay ahead of the curve. You should be, too.
Proactive steps to keep your customers’ sensitive data secure are not a luxury. It’s a necessity.
1 National Small Business Administration Survey 2007