Fraudsters Employ Credit Card Testing.

• Position: YOUR LIFE

Credit card testing by fraudsters is way up, but just what is card testing? When thieves obtain stolen credit card numbers, they conduct "card testing" to determine which numbers are associated with an active account that has not been maxed out or shut down. This typically involves using automated scripts to place small-value orders on eCommerce websites to test the validity of the card data; when they get a hit, they quickly move on to large-value transactions.

Monica Cardone, COO of Chargebacks911, Tampa Bay, Fla., says eCommerce merchants must be able to recognize and halt card testing, or they soon may face growing fraud losses. "Merchants who accept orders made with stolen credit card data are liable for the costs, including the merchandise loss, shipping, processing fees, and chargeback fees. Even low-value transactions can add up to big losses, especially when they cause merchants to exceed a card network's chargeback threshold."

Merchants must watch out for orders that contain random character strings in the customer's name, address, and/or email fields. While transactions with invalid address fields are unlikely to be processed in the first place, they often are the first sign that a fraudster is using a retailer's website to conduct card testing.

Cardone indicates that there are five key precautions merchants should take to identify and prevent credit card testing and related fraud:

* Use CAPTCHAs to deter bots. Order forms that...