There are millions of people visiting online dating sites each year who are hoping to find love or companionship. But, as the holidays approach each year, the number of scams on these sites seem to rise. Scammers are looking to take advantage of the vulnerable and lonely by targeting them through an online persona. Catfishing fraud can be for a variety of reasons, but are almost always for the financial gain of the scammer. Surprisingly, this isn’t the only direction on that fraud is coming from. Users also take part in financial fraud, sometimes knowingly and other times not. Preventing this requires a multi-pronged approach on behalf of the owner as well as the subscribers.
If you are the owner of an adult dating website, you have a fair idea of the scams that can go on behind computer screens. So, how does one prevent financial fraud to both their business and consumers?
It is important to know how these criminals work. Build your business in a way to help reduce these risks and protect your subscribers as you grow.
Understanding the Risks
There are risk factors that must be continually measured when it comes to running an adult dating website. Those who own a business in this space have to deal with dating-specific risks on top of the risks of simply being an online business. The first step to preventing financial fraud is to know what it is. Then, with the correct understanding, you can begin to find ways to reduce the effectiveness and impact of these merchant services fraud behaviors.
Adult dating websites bring together two strangers together over the internet in the hopes of sparking a relationship of some sort. Some people go to find romance, others to find friends, but an even smaller subset of people log on to scam others. The actual numbers of subscribers going with that fraud tactic in mind are hazy, but it is a real issue that leads to real consequences.
In recent years, this has become a real issue that leads to hundreds and thousands of dollars lost to the victims of this scam. But how do we prevent this financial fraud?
Help Prevent Scams
The best ways to prevent this from an adult dating business owner’s perspective is to implement a bot to filter chat messages. This way, when common phrases come up, you can implement a popup or reminder that sending money is not recommended.
Appeasing unhappy customers is something that must be dealt with in the online dating business. People have expectations with technology that is not always so easy to fulfill. When this happens, how you handle the issue is very important. If the customer service is not good, the business’ troubles become worse. Unhappy customers often request chargebacks from the bank if they believe that the adult dating company is unresponsive to their issues. This way, they can circumvent waiting for a resolution or refund from your end and get their money back right away.
Credit card processing companies and supporting banks keep track of the amount of chargebacks that happen each month. They then take the total number of chargebacks and produce a percentage ratio. When the ratio goes above the standard industry number of 3%, your business then faces the possibility of being closed. This is why it is so important to protect your business from chargeback disputes.
Stop Refund Fraud
There is no reason to risk losing your business’ payment processing capability because of a few unhappy customers. The better equipped you are to reduce this risk, the healthier your business will be. Have an easy to use communication tool that your customers can use to let you know how they feel. A chat bot, phone number, or even an email address for subscribers will lessen the possibility that they will turn to their bank first for a resolution. Just by implementing a direct line of communication, you will cut your risks significantly.
After doing this, you can make sure to be responsive to what your customers are saying. If they want a refund, it’s in your best interest to give them that to prevent further escalation. It’s never a good idea to jeopardize your business because of one customer.
Another thing that you can do on the back end to help prevent financial friendly fraud is to set up an early warning system. There are mitigation tools that you can connect to your adult merchant account that will let you know when a chargeback comes in so that you can handle it before the bank does. Oftentimes, when responded to promptly, you can take care of the issue before the bank even knows about it.
Typical Online Issues
Doing business online comes with a whole slew of issues that aren’t relevant to brick-and-mortar businesses. Credit card scams are much easier to carry out through the digital universe when compared to in-person. Because of this, many online businesses find it harder to get support and a payment processing solutions online. Adult dating businesses are no different. In fact, they’re more difficult. Along with the potential financial fraud issues mentioned above, there is a risk for reputational risks. Fraud and chargebacks can hurt your business just because you have a greater possibility to run into them.
Reduce Online Risks
Securing a PCI compliant and safe online payment gateway should be of utmost importance for your adult dating business. But the only way to make sure that you are supported properly is to partner with a high risk bank and high risk credit card processing company. With the help of high risk providers you have a much better chance at setting yourself up for success. They will most likely set you up with recurring billing best practices, an easy virtual credit card terminal for you and your customers to use, and security measures that will keep your transactions safe.
Prevent Financial Fraud
Preventing financial fraud in adult dating websites is something that takes continuous monitoring. As technology improves the ways fraud is committed also improves and increases. There are certain red flags that can be watched for including:
- Multiple memberships using the same card number
- Failed Address Verification Service (AVS) Validation
- Copied profile information
Being PCI compliant is an easy way to up the security measures on your site. It sets up rules, data security, and architecture requirements to verify that the card holder is the same person making the purchase.
Find Payment Processing
In order to help prevent financial fraud, your best bet is to reach out to high risk payment processors that can get you set up to take secure credit card transactions. Your industry may require you to reach out to high risk providers regardless due to your inherent risk. The commonality of fraud and chargebacks leads to many businesses being turned away from traditional banks.
Many online business owners will turn to merchant accounts offered by companies like PayPal or Stripe. In the beginning, the merchant account is approved and things move along smoothly. The problem begins when the merchant provider realizes the type of business which is against their terms of service. The merchant then gets notified that their merchant account has been closed. Having a business merchant account that is abruptly closed is devastating for any business.
High Risk Business
By using a high risk adult dating merchant account there are no worries about having the account closed. The account provider knows exactly what your business has to offer and has tactics to help you succeed. High risk merchant account providers work with more flexible financial institutions so that your business can process all types of payments securely and do business under protective underwriting.
High risk merchant account providers use the most up-to-date security equipment because they understand the financial fraud risks involved. You will also want a provider that makes it their business to help protect both you and your customers against fraud. Your high risk merchant account should come equipped with a suite of tools so that you are as educated and protected as possible.
Fraud will always be present and having your merchant account provider helping to protect your business helps to build a solid foundation.