Online games are under attack by cybercriminals because of the nature of the payment systems within these games that give effortless opportunities for a number of fraudulent practices like account takeovers, card testing, friendly fraud, and true fraud that can result in a crippling number of chargeback claims.
Credit card chargeback and Friendly Fraud!
Friendly fraud is an outcome of children using their parent’s credit cards to do unauthorized online purchases, which result in purchases that the parent has to make chargeback claims. Friendly fraud also occurs at the time when the cardholder is well conscious of the transaction and yet files a dispute with their issuing bank to con the merchant. The dark side of friendly fraud is that the software tools are not evolved to forecast human intentions at the time of the transaction.
How to prevent credit card chargeback?
Making a blacklist database to filter the bad players will assist gaming companies to reduce their friendly chargeback fraud. It has been predictable that friendly fraud will be repeated probably even 3 times if merchants do not take any action in preventing them in the future. Also, internal issues such as deceptive practices or as poor customer service can lead to friendly fraud chargebacks.
Online games are mainly good targets for card testing fraud as so many of its in-game purchases are in very small amounts – one or two dollar increments. Normally, a thief gains access to a stolen credit card number or thousands of them, then they start making test purchases.
These are small, incremental purchases at first, but with time grow into much more expensive, once the fraudster gets to know they’re possible. Each of these charges, small or big, can become a chargeback filed by the credit card’s actual owner.
How to Combat Card Testing?
One idea to prevent card testing is to have a fraud prevention tool in place. A good tool can do a speed check and it can put a limit on the number of instances that a transaction can come from a specific IP and spot how many cards are being used on a single account. This will help prevent card testing from happening and block those accounts.
This is the case where a credit card is stolen, the card is used to make a game account, and then the account is sold on an online trading site. When the actual cardholder such charges, they will be able to file a chargeback problem. The criminals can sell the accounts for much less than the amount they charged to the card as it is all profit to them, and the harm falls on the online game publisher and the card owner.
What is the Solution?
The best ways to fight this kind of fraud is to include fraud filters and use external tools such as a PCI-compliant payment gateway. It must become with fraud screening features, as well as AVS plus CVV matching. This is one area where gaming companies are fading for the reason that they turn off these filters by default. Having the AVS and CVV will need that the card owner provides an address and CVV. This will help lessen identity theft as criminals are likely to only a bit of this information.
So, now you know a few things about – how to prevent credit card frauds. Having said that, hackers are getting smart, and you also have to be smart to combat them.