30 Telltale Signs of Fraud: How to Recognize High-Risk Orders

Obviously, you need to have a steady stream of fresh shoppers if you want to grow your business. But new customers could bring new risks — especially if a first-time shopper has other high-risk characteristics. 

Big-ticket merchandise could attract fraudsters for a couple different reasons. Fraudsters might be treating themselves to all the expensive goodies they’d never buy with their own money. Or, they may be stocking up on merchandise that has maximum resale potential.

Any order that is more than your average ticket price should be considered suspicious. Fraudsters can afford to be excessive when they are spending someone else’s money. 

Fraudsters might try to set up their own version of your business on the black market. To do that, they’ll need an inventory of merchandise in different colors, sizes, styles, etc. 

Fraudsters often access an entire list of stolen account information. They’ll likely place as many orders as possible before the fraud is detected. 

Some fraudsters like to share with their family and friends. This tactic is especially common during the holidays when legitimate shoppers are sending gifts to other people.

When fraudsters gain access to multiple accounts, they want to check which ones are still available. This is called testing or running a card. A fraudster might use a couple different cards to complete a single transaction, testing several cards at one time.

A fraudster probably doesn’t know how much available credit there is on a card (or available funds on a debit card). If the first attempt is denied, it could mean that the transaction amount exceeded the limit. The fraudster will likely try again with a lesser amount.

The key to benefiting from stolen account information is ensuring the merchandise ships before the fraud is detected. Since the fraudster isn’t paying the bill, the extra expense isn’t a concern.

A freight forwarder is a company that receives shipments and forwards them on to their final destination. A fraudster might use this service to route stolen goods to an international address. 

An IP address helps identify two different things: the device used to make the purchase and the geographical region where the internet was accessed. If neither the shipping or billing address is in the same region as the IP address, it could be a sign of fraud. 

Fraudsters might not know the cardholders’ real contact information, and they probably don’t want to give you their own personal information. That leaves fake information. Be on the lookout for obviously fictitious entries, like 222-333-4444 or asdfjkl@freemail.com.

Again, fraudsters rarely use legitimate information, so look for strange inconsistencies. For example, if the customer’s name is Jane Doe, it wouldn’t be natural to have an email like Steve.Smith@email.com

The orders for your loyal, repeat shoppers likely have some common characteristics — like a pound of dog food on the first Monday of the month. Any time you see a regular shopper making irregular purchases, it might be a sign of fraud. 

The BIN (bank identification number) is the first six digits of the cardholder’s account number and identifies the bank that issued the card. Several transactions from the same BIN could mean the bank was hacked and account information was stolen in bulk. 

Fraudsters will often keep trying to place a fraudulent order, even if the first attempts are declined. The fraudster will likely try different combinations of information until the right credentials are found.

Genuine shoppers will be able to quickly and accurately provide personal information. Fraudster might mispronounce names or pause to consider their options before answering.

If the caller isn’t worried about the details of your return policy, rebates, or warranties, it could be a sign of fraud.  

Fraudsters want their stolen goods to be shipped before the scam is detected. They will likely be very interested in how quickly the order will be fulfilled and shipped. 

Telephone relay services help individuals who are deaf, are hard of hearing, or have speech impairments. This service transmits typed messages instead of voice. A fraudster might use this service to mask inconsistencies that would otherwise be suspicious — like a man using a woman’s card.    

A fraudster might not show attention to details while shopping. For example, the purchase might include clothing for different styles, sizes, and genders. 

Even the most well-researched, decisive shopper will have a few questions while making a major purchase. If a customer doesn’t seem worried about things like quality, compatibility, or price, it could be an indicator of fraud.

A fraudster might try to hurry the checkout process or ask a lot of questions to distract the cashier while paying.  

If the first purchase went ok, the fraudster might return to try another.  

Shopping as soon as possible in the morning could mean the fraudster acts before the cardholder is even awake and aware of a problem. Buying at the end of the day could hide any suspicious behavior in the flurry of closing-time activity.  

The fraudster might be worried about mixing up personal cards with the stolen card. It might be kept separately, like in a pocket. 

Both a slow, deliberate signature and a hurried, illegible one could be signs of fraud. Either the fraudster is meticulously trying to replicate someone else’s mark or trying to brush off any discrepancies by being rushed. If the shopper first turns the card over and checks the signature, that’s a dead giveaway!

If a shopper has to consult a piece of paper, a note stored in a phone, or a reminder written on the palm of a hand, it could be an indicator of fraud.

People who are doing something they know they shouldn’t will often have physical indications of their guilt and unease. 

There are several different indicators of fraud, and monitoring each and every one is challenging. If you’re manually reviewing your orders and struggling with the labor-intensive task, there might be a fraud detection tool that can automate some of your efforts. 

If you suspect friendly fraud is to blame, and not criminal fraud, use Midigator to fight back. Schedule a meeting with our team today to discuss your business’s unique challenges and how Midigator can help.