Web Hosting Account Verification: Important Steps To Avoid Fraud Or Abuse

Web Hosting Account Verification

If you are a cheap web hosting company, you have probably been the victim of fraud or abuse at some point. It's easy to see why this is common: it's easy to set up a cheap hosting account using a hacked credit card number, or even PayPal account, using that web hosting account for phishing or spamming purposes. If you offer free web hosting, it's even easier: no stolen credit card required! 

Is there any way you can avoid these problems as a web hosting provider? Most certainly! By educating yourself on the risks associated with fraud or abuse and verifying all accounts prior to activation, you can lower your risk substantially. Let's take a look at how to protect yourself from becoming a victim.

Web Hosting Account Verification: Determine Your Risk

There are many ways a web hosting company sets themselves up to be a target for abuse and fraud. If your company fits into any one of these categories, you can either change your business model or more closely verify account information:

• Free Web Hosting – Free web hosting accounts can be set up without the need for credit card numbers or PayPal details. Because there is no sensitive data, a web hosting provider might falsely believe there is less verification that needs to take place. It's actually the opposite: because there is no verification, false information can be provided without a second thought. If you want to rectify this, simply charge a one-time account setup fee. People who don't want to risk providing payment information won't even accept the small fee, weeding out some nefarious customers from the get-go.
• First Month Free – Yes, you'll attract some clients this way, but you'll also succeed in attracting those you DON'T want. Instead, offer a different sort of deal: provide the first month free if customers pay, for example, three months in advance. Just as above, those who wish to avoid entering payment details will look elsewhere.
• Low Monthly Price – Cheap web hosting services experience more issues regarding fraud than higher priced services.

Web Hosting Account Verification: How To Avoid It

One way to keep fraudsters at bay: account verification. Whether you rely on a fraud screening service or screen accounts prior to activation yourself, it is highly recommended. You can even choose to rely on the fraud screening service and then manually screen those who fail. Here are some ways to verify the validity of accounts:

• Phone Number/Address/IP Matching – This is pretty simple: if the address and phone number provided during sign up don't jive with the location of the IP address, you should beware. Although it is possible that the client was ordering services from the road, it is just as possible a stolen card or PayPal account is being used to purchase a hosting package. In the event things don't add up, telephone verification can help you weed out which is the case.
• Telephone Verification – As above, the phone number should be from the same area as the IP and physical address of the account holder. However, what about those pesky pay-as-you-go phones? Simply call the phone number used when the account was created in order to double check that person actually signed up for a web hosting account. At the same time, it will also help uncover credit card theft.
• ID Verification – When all else fails, a surefire way to assure a person is who they say they are is to require new clients scan and email or fax a copy of their driver's license, or something government-issued that proves their identity. Check that the address and other information matches the information provided at sign up. Those who have bad intentions won't be making fake IDs to obtain a web hosting account when they can just turn elsewhere.

Do you already verify identity of your web hosting clients? Have you had problems with fraud in the past?