Many people who have recently had their card information stolen have noticed some of the charges have been to charitable organizations.
According to LowCards.com, a credit card information site, criminals who steal credit card numbers use charities as a way to test the cards and ensure they work. The Chronicle of Philanthropy reported that stolen credit card information isn’t very valuable unless it has been verified. Thieves find out the card is good by providing a donation to a charity, making them much more valuable to sell.
In order to attract more online donations, many charities have simplified their donation process. While this makes it easier for legitimate donors to provide the charity with money, it also makes it possible for criminals to complete transactions. The fraudulent charges, in some cases, can be charged to the charity, according to LowCards.com. This usually isn’t devastating because the charges made to verify the card are small. However, most charities need every penny they get to continue to run their facilities and programs.
“There’s a giant target painted on the industry’s back that is very advantageous for credit card thieves,” said Kevin Conroy, chief product officer at GlobalGiving, told The Chronicle of Philanthropy.
According to The Chronicle of Philanthropy, the Jack and Jill Children’s Foundation reported $170,000 in refunded donations. Most of those donations were under $7. No matter how big the charges were, the organization had to pay credit card companies charge back fees. These fees can be over $20 per transaction.
How to stop the criminals
The easiest way for charities to stop credit card thieves from making fraudulent transactions is to update their systems with some of the technology retail stores have, including added security and multiple steps that require more personal information than many credit card thieves have.
Closely monitoring donations can help avoid accepting fraudulent charges. The Chronicle of Philanthropy said to watch out for donations that are very small, come in rapid succession and aren’t whole numbers. Additionally, charities should try to pay attention to IP addresses and identify any that don’t match the card holder’s billing address.
Online donation forms that request email addresses, expiration dates of card numbers and security codes are also a good idea, Steven MacLaughlin, director of analytics at Blackbaud, a nonprofit software provider, told The Chronicle of Philanthropy.
By utilizing the some precautionary measures, charities should be able to reduce the amount of fraudulent charges that occur.
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