Fraudulent orders are any type of business orders that are created and submitted with information that is misleading or deliberately inaccurate. Orders of this type are often placed using information that has been stolen, or when there is no intent to actually pay for the goods once they are received. The incidence of these types of fraudulent and suspicious orders have increased significantly in recent years, especially in online situations.
One type of fraudulent orders has to do with placing orders using information obtained illegally, such as identity theft. Here, the individual who is placing the order uses the name, address, and credit card information of another person without his or her permission. For this reason, many vendors have initiated protocols that make it more difficult to place online orders using stolen data by requiring some type of verification from the buyer before accepting and processing the order. Should the buyer be unable to provide the requested data, the order is rejected. In some nations, the incident is reported to law enforcement officers.
Another earmark of fraudulent orders has to do with the country of origin of the purported buyer. There are several nations around the world that provide the ideal setting for this type of illegal activity, with little to no avenue of recourse on the part of the victim. This has led some businesses to decline orders from specific countries that are known to be sources of fraudulent orders as part of their risk management strategies.
Unusually high volumes of goods and services requested from a buyer using a personal credit card is also a common indication that a fraudulent order is about to be placed. At times, criminals will attempt to get around this type of situation by placing multiple orders using different client names and credit card information, but with all goods and services deliverable to the same address. Today, many vendors include crosschecks in their ordering system configurations to pick up on this type of activity, making it possible to identify potential identity theft and report the activity to authorities.
Fraudulent orders are also sometimes characterized by attempts to use multiple credit cards to pay for the orders, before finally submitting information that is accepted. When this is the case, the criminal is often working down a list of stolen credit card numbers, eventually finding one that is active and has enough credit remaining to complete the purchase. Some order systems actually lock out a buyer if a certain number of unsuccessful attempts are made, protecting the vendor from incurring losses due to payments later being reversed.
The range and design of fraudulent orders is so broad that there is no one strategy that protects vendors in every situation. By incorporating checkpoints and safety measures into any type of ordering process, it is possible to limit the risk of becoming a victim. This is true with both manual ordering to establish a new account and make a purchase as well as with online ordering policies and procedures.