The biggest problem online businesses have is that they cannot rely on traditional security measures to detect credit card fraud. They can't require a customer's signature, check a photo I.D., or use a credit card terminal. Crooks don't even need the actual credit card. With the appropriate account number (obtained in a number of ways, including phishing scams or PC hacking), expiration date and billing address of the cardholder, any moderately technically savvy thief can circumvent most online antifraud safeguards. If the card remains with the cardholder, he or she won't freeze the account until they notice the unauthorized charges. To make matters even worse, an online business that accidentally takes a fraudulent credit card order is responsible for the loss, including a chargeback fee of up to $25 (U.S.).
Internet businesses need not stop taking credit card orders online, however. There are a number of ways to offset the danger. See Preventing Online Credit Card Fraud for more information.
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