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      For Your Business July 22, 2025

      Cutting-Edge Business Protection: Combating the Top 5 Merchant Fraud Activities with Old National Bank

      By Elle Werley, Merchant Services Director, Old National Bank

      From the more traditional credit card fraud to internet “bots,” and now sophisticated artificial intelligence (AI), the modern digital economy is rife with fraud, targeting merchants both small and large.

      Merchant fraud is an ever-evolving threat that can cost businesses tens of thousands of dollars (or more) and, perhaps more importantly, irreparably damage your customer trust. Fraudsters are constantly refining their tactics, but we at Old National Bank are on the cutting edge of repelling attacks while helping businesses recognize, prevent, and respond appropriately to threats.

      I tell our Merchant clients to trust their instincts. There’s not been a single time that I’ve talked to a merchant who’s been victimized by fraudsters that has not said, ‘Yeah, it felt weird.’

      Understanding the Top Merchant Fraud Threats

      Enumeration attacks and refund fraud are growing threats that can be difficult for merchants to detect, and fraudsters will exploit business charity activities, disasters, and busy seasons, targeting business weak spots.

      The five major types of merchant fraud that businesses should be aware of are:

      1. Foreign Shipment Fraud

      Fraudsters use stolen credit cards to order high-value goods and have them shipped to fake or untraceable addresses. These scams often result in significant losses — sometimes up to $40,000 per shipment.

      2. Immediate Pickup Fraud

      This occurs when a fraudster places an order online or over the phone and sends someone to pick it up in person. Since the card was never physically present, the merchant is often left liable when the transaction is disputed.

      3. Refund Fraud

      This includes internal threats such as employee embezzlement and external scams such as “friendly fraud,” where a customer disputes a legitimate charge. In some cases, fraudsters even steal merchandise and return it for cash.

      4. Enumeration Attacks

      Using internet bots, fraudsters “penny test” thousands of stolen card numbers on unsecured payment portals. Even if the transactions fail, merchants can be hit with hefty authorization fees.

      5. Seasonal and Opportunistic Fraud

      These scams spike during busy seasons or after disasters. Fraudsters may pose as charities or emergency responders to exploit businesses’ goodwill and urgency.

      Red Flags, Best Practices, and How Old National Can help

      Subtle signs — like mismatched shipping and billing addresses, rushed orders, or unusual customer behavior — can be early indicators of fraud.

      Old National Bank offers a suite of tools and services to help businesses stay ahead of fraud.

      • PCI Compliance Assistance: Helping businesses maintain compliance reduces fraud exposure.  Over 70% of U.S. data breaches cite non-PCI compliance as a significant contributing factor.
      • Fraud Monitoring & Alerts: Real-time transaction monitoring and alerts help detect suspicious activity early.
      • Secure Payment Solutions: Implementing technologies like Point-to-Point Encryption, 3D Secure, velocity filters, and tokenization can reduce the risk of card-not-present fraud.
      • Employee Training: Implementing fraud prevention into their employee training.
      • Collaborative Support: By working closely with merchants, payment processors, and law enforcement, Old National helps coordinate a rapid response to fraud incidents.
      • Staying Vigilant in a Changing Landscape

      Fraud doesn’t sleep. With fraudsters constantly adapting, businesses must remain proactive. That means staying informed about emerging threats, investing in secure payment infrastructure, and fostering a culture of vigilance.

      Old National Bank is committed to being a trusted partner to our clients in this fight — helping businesses not only recover from fraud, but to prevent it before it happens. 

      To watch our webinar on merchant services fraud, click here.

      To learn more about protecting your merchant activities, email Elle Werley at elle.werley@oldnational.com, or view Old National’s line of merchant services for your business at oldnational.com/business/treasury-management/merchant-services.

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