A common data point that merchants should examine before accepting or declining a purchase is a billing and shipping mismatch. The reason may be simple (the order is a gift) or could point to something more (the credit card number is stolen).
When an order arrives with a billing address different from the shipping address, the obvious questions are:
- Is the package being shipped to the cardholder? (Does the real cardholder actually live at the address that the package is being shipped to?)
- Is the package being shipped to anyone other than the cardholder? (Why?)
If the package is being shipped to the cardholder
If at all possible, checking the residency of the delivery address is the quickest way to establish if the cardholder name matches the known delivery address occupants.
If, through a manual investigation, the resident occupants of the shipping address cannot be uncovered and verified, other factors can heavily play into a merchant’s decision to ship to a billing/shipping mismatch. Have there been any prior orders to that address from the merchant? Does the consumer have an online presence that confirms the cardholder lives at the delivery address? If, through investigating, a merchant finds that the cardholder recently moved (or the house just sold), or the property is actually listed as a vacation house, it can positively affect a decision.
If however, the delivery address is a P.O. box, freight forwarder or other type of non-residential address, this makes the order more suspicious. While there can be plausible reasons for why a customer might ship a package to a non-residential forward address, many fraudsters use P.O. boxes and freight forwarders as reshipping locations to get their packages without detection.
If the package is being shipped to anyone other than the cardholder
If a package is being shipped to a family member, then concerns about the separation between billing and shipping addresses tend to dissipate. When the last name of the recipient is different from the cardholder, or a possible family connection is drawn into question, it is important to understand who the package is being shipped to, and what the possible connection could be. It’s imperative to find an established connection to the cardholder in order to comfortably approve the order.
If the cardholder can not establish who the actual recipient is, or if there is no known connection between the cardholder and the delivery recipient, this is a red flag for merchants.
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