Detecting fraud in an online giving system

Dec 2, 2020 by

Diane Kern

Here’s how you can catch fraud before it causes any trouble for you.

There’s no doubt online giving is a good thing; it keeps our money safe and our tithe reliable. And even though most online giving options are secure, that won’t stop some criminals from trying to sneak in and attempt fraud.

While churches and other religious organizations are less likely to see money directly stolen from their bank account, another type of fraud can be committed when a criminal uses an online giving system to run several stolen credit card numbers. We refer to this as  “card running”. If this type of fraud goes unnoticed, it may result in some hefty fees paid by the organization later on down the road.

So how does a church become a victim to "card running"?

Here's what can happen:

1. A list of credit card information is stolen from an online store by a hacker, and sold to the highest bidder.

2. The criminal who purchased the credit card information is looking to use it, but first needs to know that they have a list of valid credit card numbers. So they look for a way to test them.

3. A website that accepts payments or donations without a shipment of goods is ideal to test on, because those accounts are typically watched less closely than other online stores.

4. Criminals will use these organization’s websites to test the stolen credit card numbers. They will test multiple cards on one website by donating a small amount of money to the organization with each card, typically a penny or a dollar. Because the transactions are so small, they often go unnoticed by the account managers.

5. If too much time passes before an organization notices these transactions, upon returning the money, the organization may have to pay fees on top of the returned charges.

How to prevent fraud from happening in the future

Like eCatholic Payments, certain systems have special features built in to help stop and detect unusual transactions as well as validate authentic ones. However it is always best to pay attention to transaction reports. Skim through your account activity regularly and make sure you don’t spot anything unusual. We recommend at least twice a month.

The more familiar you are with your donations activity, the more likely you will be able to detect when something isn’t right. So like a good holiday shopping tip, the same goes for organizations:

Pay attention to transactions and know when something needs to be reported.

What can you do if fraud comes knocking on your church doors?

• First, you’ll want to contact the support service of the online payments product you are using so that they may investigate.

• You’ll also want to void any unsettled fraudulent transactions. However, be sure to report the incident to the support service for investigation even after the transactions have been voided.

• Refrain from refunding any large transactions (more than $5) until an investigation occurs.

Remember, we’re always here if you need an extra set of eyes. If you think something looks like fraud, but are not sure, give us a call anyway. It’s better to be safe and we’d be more than happy to help keep you protected!