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Your instincts are a great warning device for identifying fraud.

But what do you do next? Keep the following guidelines in mind when completing all your customer transactions and you'll have the knowledge you need to help protect your business from fraud activity.

Card acceptance procedures
You can help prevent fraud by following these basic Card acceptance procedures:

1. Does the Card show the CID Number?
Pre-printed Card Identification (CID) Numbers must always appear above the Card Number, on either the right or the left edge of the Card.

2. Is the customer using the Card really the Cardmember?
Only the person whose name appears on a Card is entitled to use it. Cards are not transferable. Does the signature on the receipt match the name on the front of the Card and the signature on the back? The signed name should not be misspelled or obviously different.

3. Do account numbers match?
All Card Account numbers start with "37" or "34". Some Cards also have the Card Account number printed on the back of the Card. These numbers, plus the last four digits printed on the Charge Record, must all match.

4. Is the Card valid?
The transaction date must fall within Card's Valid Dates. The Card may not be used after the last day of the month which appears on the Card.

Does the Card appear to be altered?

Carefully examine the Card before accepting it. Do not accept any Cards that appears physically modified.

Notice the front of the Card
Card Numbers should not appear re-embossed, crooked or unevenly spaced. There should be no "halos" of previous numbers under the embossed account number and Cardmember name.
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Examine the back of the Card
• Card Number printed on the back should be the same Card Number that is embossed on the front.
• The signature panel should not be taped over, mutilated, erased or painted over.
• The magnetic stripe should not appear to be deliberately scratched or destroyed.

Keyed transactions have a higher fraud risk
Many built-in Card security features cannot be accessed when keying in the Card Number. Take these steps to help ensure that the Card is valid.
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What to do if you suspect fraud
Conduct yourself so that you don't arouse the customer's suspicion. The most important thing is that you are safe and your business is protected. Never put yourself or your employees in unsafe situations.
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Internet, phone, and mail order transactions often carry a higher fraud risk because the Card is not presented.

Following these guidelines for Card acceptance and authorizations can help.

When a Card is not present:
• Ask for the Cardmember name exactly as it appears on the Card.
• Request the Card Number and Card expiration date.
• Request Cardmember home or business phone number and billing address.
• Verify Cardmember information via one of our verification systems.
• Acquire ship-to name and address (if different from billing address).
• Select carriers that do not allow shipment re-routes.
• Identify each business model: internet sales, telephone sales or catalog sales by authorizing each model through a separate Merchant Number.
• Require the Card to be presented if phone/mail/internet orders are to be picked up at retail locations.

What to do if you ship merchandise:
American Express recommends shipping to the Cardmember's billing address to help avoid a fraud-related chargeback should a Cardmember dispute the charge.
• If you fulfill an order more than 30 days after the original authorization, call again for a new Approval Code before mailing the merchandise.
• Charges cannot be submitted for payment until the merchandise is shipped.

When Card is present
Be aware of your customer's behavior

Is the customer behaving normally? A suspicious situation may arise, causing you to question the authenticity of the Card, or the legitimacy of the person presenting it. Be wary if a customer . . .
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When Card is not present
Recognizing Risky Behavior
Certain behaviors can indicate that a transaction has a higher risk of being fraudulent. Trust your instincts. While the following situations may also occur during a valid transaction, be suspicious if the customer . . .
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Cut your risks
Criminals are hoping that you won't detect their activities to defraud you. But it is important to your business that you do. Undetected fraud can result not only in lost goods and services, but also chargebacks and higher discount fees. Being vigilant about unusual spending can be your first line of defense.

Use American Express fraud tools to help mitigate fraud

American Express offers solutions to help mitigate the chances of fraud and reduce this cost to your business. We offer fraud mitigation tools to help verify that a purchase is valid. Some solutions are as simple as calling when you suspect a problem. Others can be incorporated into your Point of Sales systems. You can choose the solutions that best fit your business.
Learn what tools are appropriate for your business

Merchant Risk Council

The merchant Risk Council (MRC) is a trade association founded by American Express in partnership with leading merchants and card processors focused on mitigating e-Commerce fraud and risk. Formed in 2000, the MRC now has 500+ members and is a leading forum for discussion of best practices and new anti-fraud initiatives. Being an MRC member gives you access to the resources you need to mitigate fraud for your company by providing opportunities for networking, education, and advocacy.

MRC members include businesses of all types and sizes. By improving the security of all online merchants, large or small, we help limit exposure to fraudulent credit card transactions. And as consumers become more confident that their personal information is safe, e-Commerce will continue to grow.

Additional Resources

Merchant Policy

Policies and procedures governing acceptance of the American Express Card, as well as helpfultips, tools, and best practices.
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