The Clearsale Blog

Fraud Targets Charities and Small Businesses. Here’s How to Fight it

Fraud Targets Charities and Small Businesses. Here’s How to Fight it

Stolen credit card data is big business, and it’s no secret that criminals use this information to target online retailers by making fraudulent purchases and then re-selling the merchandise. What’s less widely known is how small mom-and-pop businesses and charities fall victim to the same criminals who go after big retailers. These small entities can least afford the damage fraudsters can cause, but they’re also the most vulnerable to a particular kind of fraud known as card testing. Here’s what every non-profit organization and small business should know about this common and disruptive type of fraud.

What is card-testing fraud?

When criminals buy stolen card data on the dark web, there’s no guarantee that the card numbers are still valid, and the card data is often incomplete. It may be missing card verification values (the 3-digit security numbers on the back of each card), name and address information, and other key information that large retailers use to screen orders for fraud.

Without this information, criminals have to guess until they get it right for each card number. So they “test” by placing small orders with small online retailers or making donations to charities to see if the CVVs and billing zip codes they guess at are the right ones. When they find a match that results in a purchase or donation, they use that card and tested data to go after bigger retail targets.

Why do card testers target small business and charities?

In short, they do it because they’re most likely to get away with it. Major retailers, and even many small to midsize online sellers, have in-house and/or third-party fraud detection services to screen their transactions. Many also follow best practices that limit the number of times a customer or donor can enter card information incorrectly before the order is closed.

Many new and small businesses mistakenly think they’re too small for criminals to notice, or they’re unaware that this type of fraud exists, so they go without fraud prevention programs. Charities, meanwhile, must balance the need to making giving easy for donors with the need to prevent fraudulent gifts that can skew budget planning and incur costly bank fees.

If the amounts are small, why does it matter?

[To continue reading please click here].

New Call-to-action

You may also like

ClearSale Wins Comparably Awards for Best Work-Life Balance and Happiest Employees

ClearSale Wins Comparably Awards for Best Work-Life Balance and Happiest Employees

Fraud protection leader recognized by career site for a second time this year

[Industry Focus] Fraud Risk Profile for Nutraceutical and Drug Retailers

[Industry Focus] Fraud Risk Profile for Nutraceutical and Drug Retailers

As people become more conscious of what they’re putting into their bodies, there’s been an increased demand for high-quality supplements and healthful food and beverages. The result has been a..

3 Ways Tech Can Benefit Remote Teams

3 Ways Tech Can Benefit Remote Teams

Ecommerce businesses are used to an ever-evolving digital connection between them and their customers. But 2020’s COVID-19 pandemic has resulted in that digital connection making its way into the..

Shopping Habits by Gender: What’s Changed in 2020

Shopping Habits by Gender: What’s Changed in 2020

Do men hate shopping online? Are women more worried about fraud?

How Management Should Contribute to Fraud Protection

How Management Should Contribute to Fraud Protection

As companies grow, management often delegates business-critical tasks—marketing, technology, fraud prevention—to different departments. While it might seem to be an efficient way to get things..

ClearSale Becomes Shopify Plus Certified App Program Partner

ClearSale Becomes Shopify Plus Certified App Program Partner

The fraud protection leader has been selected as a premier app provider for the highly regarded commerce platform.

Jewelry E-Commerce Statistics and Insights

Jewelry E-Commerce Statistics and Insights

Whether worn for cultural reasons or pure ornamentation, jewelry is often anything but practical. And that’s precisely why it’s such a pleasurable purchase. Jewelry is the classic “splurge.” But..

“I Don’t Need Fraud Protection — My Business Isn’t at Risk!”

“I Don’t Need Fraud Protection — My Business Isn’t at Risk!”

As an e-commerce merchant, you know the risk of fraud, false declines and chargebacks. But maybe you think it won’t happen to you because you’re a relatively new — or small — e-commerce merchant,..

Account takeover is the biggest fraud threat U.S. consumers haven't heard of

Account takeover is the biggest fraud threat U.S. consumers haven't heard of

Account takeover fraud is a huge problem, but most US consumers don’t know about it. Only 36% of US consumers say they are familiar with account hijacking fraud, even though it’s one of the..

Want to write
for our blog?

Please review our writers' guidelines
https://www2.clear.sale/press/clearsale-guest-blog-guidelines
and then email guestwriter@clear.sale with your pitch!

Subscribe to our blog