After being in the credit world for more than 18 years, I decided it was time to bite the bullet and further my education. I just finished the Principles of Business Credit class and let's be honest, my world has been rocked!

By taking this class, I've begun to notice how many of the details that I once knew have been hidden in the back of my mind. I regret not taking full advantage of all that NACM has to offer in regard to keeping those details sharp in my mind and up to date. I used to keep a quote by Dr. Joyce Brothers on my desk that read, "Trust your hunches. They're usually based on facts filed away just below the conscious level." If I would have kept that saying on my desk and taken this class a year ago, I could have saved our company thousands of dollars. Allow me to explain.

About six months ago one of our employees came to me and told me that he felt like one of the phone orders that had been placed in his department was fraudulent. I went down and spoke with the employee who had taken the order and he provided me with the details. He had the company's name and address which was in the state of Washington. The person placing the order was calling from an office in Wyoming. The materials were going to be picked up from our yard by a separate trucking company and delivered to California. Is your gut telling you anything yet? To make matter worse, this order was being paid for with two credit cards, both with billing addresses on the East coast.

The materials had already been special ordered from Salt Lake and would be delivered to our yard the next morning. I stated my concerns. The response I received was, "The credit cards have already been run and they went through." I questioned again who was responsible for the charge back if the credit cards were later challenged by the cardholder and deemed fraudulent charges. I was assured that it would be the credit card company's responsibility, as long as we have all of the necessary information.

To end this story, yes, the credit card charges were fraudulent. No, the credit card company is NOT responsible for the charge backs. And yes, the materials were already on their way into Mexico.

The card acceptance guidelines for Visa merchants states the following common characteristics of suspicious transactions.

• Rush orders - urgent request for quick or overnight delivery
• Random orders
• Suspicious shipping address - shipping address different from billing address on the cardholders account
• First-time shopper - criminals are always looking for new merchants to steal from
• Larger than normal orders - stolen cards or account numbers have a limited life span, criminals need to maximize the size of their purchase
• Transactions with similar account numbers - may indicate the account numbers used have been generated using software available on the internet

And the list goes on. I think we hit most of the items discussed on the warning list.

If I would have had policies and procedures in place for handling transactions for absent cards outlining what the card acceptance guidelines were for Visa merchant states, this whole thing could have been avoided. I would not have just been going with a "hunch," I would have had my facts on paper and not just buried in my subconscious mind.

According to the Nilson Report dated October 2016, global credit card and debit card fraud resulted in $21.84 billion in losses due to credit card fraud in 2015, with 38.7% of the losses being in the United States alone. Card issuer losses are mainly from point of sale counterfeit credit card transactions while merchant losses occur from absent card purchases. As fraud losses continue to grow worldwide, we are expected to reach $12 billion in losses in the United States alone by 2020 according to the Nilson Report.

The President of Scholzen Products and I have a saying for when we get burned, "The first time, shame on them and the second time, shame on us." It is important for us as credit professionals to do everything in our power to keep the losses of our company to a minimum. Taking advantage of all that NACM has to offer is the first step in helping to accomplish this goal.