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BNZ warns businesses of credit card Internet fraud

27 January 2004

Bank of New Zealand warns businesses of further international credit card Internet fraud

Bank of New Zealand is warning businesses to be wary when accepting any online credit card payments from overseas customers, following some incidents of apparent fraud in several particular countries.

Bank of New Zealand is aware of at least four incidents last week where credit card merchants have accepted overseas credit card payments via their email address or website and forwarded the goods to the buyers, only to discover the credit cards were stolen or used without proper authority.

“These are standard textbook scams and are not Bank of New Zealand specific. Most of the credit cards that are used prove to be drawn on American banks and are used without the legitimate cardholder’s knowledge or authorisation,” says Hugh Kavanagh, Bank of New Zealand head of sales for domestic and international payments.

Mr Kavanagh says merchants should be particularly wary if they receive an order, which requests goods to be shipped to a country where the products would normally be readily available in the local market. In particular businesses should be cautious of orders that are generated from Africa or Indonesia.

“These are the hot locations for this type of credit card fraud,” says Mr Kavanagh.

Other warning signs when accepting orders via phone, email or the Internet include unusual large one-off purchases, orders to an international address that require urgent delivery, and orders that are sent from free email services, such as Yahoo or Hotmail.

Measures which businesses can take to minimise the risk of fraud or theft include seeking authorisation of a card transaction from the bank that issued the card.

However, Mr Kavanagh says authorisation can only guarantee that funds are available on the credit card and the card has not, at that point, been reported lost or stolen. He strongly urges merchants to undertake the additional security measures, as advised by their bank, to protect themselves against losses.

“If merchants are suspicious of a particular order they should request the name of the cardholder’s bank and the country in which the card was issued. If the fraudster is not aware of the bank it is likely that they will stop the order. It is also good practice to ask the cardholder to fax the front and back of their credit card along with suitable identification, such as a drivers licence,” he says.

Bank of New Zealand merchants have been recommended to follow the measures detailed in the brochure ‘Minimise you risk from credit card fraud’ which is available from,1184,2-22-60,00.html .

However Mr Kavanagh observes that the vast majority of commercial transactions carried out electronically are legitimate.

“People like to do business via email and websites, and Bank of New Zealand has the facilities to support that. It’s the small number of illegitimate transactions you have to watch out for,” he says.


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