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Finance

Tips To Prevent Chargebacks and Fraud

What are chargebacks? A chargeback is a mechanism created to solve those charges that are made to a credit or debit card that are not recognized. It is a way to protect the cardholder from charges made without their consent. It is generated when a cardholder contacts their bank directly to notify that they do not recognize a charge made to their credit or debit card by your business. At that point, the cardholder’s issuing bank sends the chargeback request to the business bank. While you are focused on running your business, you can lose everything if you are too lax about information and do not take a protective stance. Prevention is better than waiting until this occurs. 

Secure Links

Before clicking on a link, hover over it and see where it leads. If it looks weird or ends with an unknown suffix, do not click on it. For example, know the secure link of your bank or other websites before clicking on any. Make sure that a website address or URL starts with https://, which means that the website is protected against any fraudulent activities

Company Security

If you own a company and doing business online, you should install appropriate firewalls and security software that include email and Internet protection. Install patches and update the system regularly. Establish robust employee training and safety awareness program that includes regular testing and compliance.

Authentication and Protocols

Encourage your employees to establish two-factor authentication and security protocols for company payments. Always use double authorization. Make sure the process for making payments is not run by a single employee because no one person can be trusted.

Spotting Fraud

Monitor your online bank accounts and business credit frequently. Review your bank accounts daily. By making it part of your routine, you can spot fraudulent activity more quickly. In fact, daily reconciliations could allow you to identify it earlier and thus have a higher chance of recovery. If possible, you might even want to consider doing same-day reconciliations.

Stay Vigilant

Take advantage of your bank’s alert features and establish internal controls to prevent payment fraud. Shred documents containing confidential information before disposing of them. Change your passwords frequently. By staying vigilant, training your staff to do the same, and adopting safe practices, you can reduce the likelihood that your business will be the victim of fraud. You are encouraged to follow the fraud protection tips above to help with chargeback prevention.

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