Web Hosting Fraud Protection

Fraud, just like in other industries, is a serious problem in the web hosting industry as well. I can never emphasise enough the importance of fraud prevention. Fraudsters not only cause grief to the owner of the credit card/paypal accounts they steal and the web host, but collectively have a damaging impact on the internet. They (greatly) contribute towards spam, phishing, virus/malware/adware distribution and the distribution of pirate software. As a web host, it is your responsibility to do as much as possible to combat fraud.

Those utilising Reseller hosting are just as responsible. You need to use all the resources available to you, your gut feeling and take pro-active measures in preventing fraud.

In this article I would like to go through some steps you can take to prevent fraudsters from gaining acess to your systems.

The article is intended for those offering web hosting on either a shared platform (like reseller hosting) or dedicated platform (such as VPS or dedicated server)..

When you receive an order, it's important to pay attention to detail. Fraudsters are usually signing up with many hosting companies at a time, it's not their money so they don't care how much it costs. Typically fraudsters purchase the more expensive packages to lure the
provider into accepting. They hope they will be blinded by the money and be more interested in the money than doing a proper check. Well, take a good look at that money because it won't be in your account long once the original account holder notices it and disputes the transaction.

Here are some elementary checks you can perform to combat fraud..

1. Check the WHOIS of the domain.
Verify the details of the WHOIS match that of the domain. Check the domain nameserver history. Has this domain been hopping unsually from host to host, is it a new domain.. Does the domain name make sense. Is it using WHOIS privacy? If the details don't match, then prepare to be more thorough.

2. Check address on Google Maps
Although simple, check the address on Google Maps. Does it resolve to a proper location? Does Google return an error? Not a very accurate check, but still work checking nevertheless.

3. Check content of the website
Does the site have any content? If it's been established for a long period of time and has no content, then it raises and eyebrow, but this alone is not enough of a reason to reject as their are legitimate reasons why the content may not be what you expect.

4. Check for spelling errors
Check the information provided. Has everything been spelt correctly? As the user spelt his/her own name, addresses and such correctly?

5. Check for grammatical errors
Do you see grammatical errors in the information provided? Elementary mistakes? No capitalisation, no full stops, incorrect formatting and such.

6. Check password decided
Majority use a password which is hard to guess. What did this user decide? Is it something easy to guess, same as the username?

7. Check for anything out of the ordinary
Check for anything else which doesn't seem normal to you.

8. Telephone verification
Ring the person to check the details with them. If everything checks out, use the opportunity to welcome them to the company and ask them if they have any questions.

If in doubt, ask the customers. Yes, some of them do find it offensive, some of them refuse to give anything further and just say they will go elsewhere, but majority co-operate very well.

Additionally, you can sign up with various agencies to do more thorough checks. For example, InnoHosting on large orders does many in detail checks such as checking the owner of the telephone number provided, credit checks, bank account checks, address checks and more.

The above should be in addition to using an automated service such as MaxMind.

Pick Your Niche!

With so many webhosting companies around, how can you possibly become successful on a large scale? Why should
anybody decide to go with your company? How will they even find out about your company?

The trick is, don't go after everybody at the same time. The hosting industry is huge with many new potential customers and segments you can go into. Mainstream hosts tend to target those that are new to webhosting, offering a high amount
of webspace and bandwidth which the user doesn't need or will ever fully use. You can of course go into mainstream hosting, but you will have a few large companies to compete with that have a huge advertising budget.

Alternatively, you can take the easier road. Find small niche's which you can exploit. For example, you can offer premium hosting services, local hosting services, country specific hosting services, speciality hosting services, hosting services to your customers of another business perhaps and much more.

When you target a niche, naturually you will have less competitors to deal with. You can set a higher price, have flexibility to offer something you are competent in.

But don't just pick any niche and go into it - write down the things you are good at, things which you know a lot about and see which one closely resembles a hosting niche you can look into. You will have more drive and motivation when you do something you really enjoy and know a lot about.

Of course, just picking a niche won't guarantee success or customers. It will increase your chances at gaining a customer, but you still have a lot more to do before seeing a viable return..Within the niche you choose, you need to differentiate yourself from the rest. Offer something they don't. Everybody promises "fast support", "99.9% uptime", "24x7 support", "backups" and whatnot. That is not enough of a reason for why people should sign up with you. You really need to think hard about what you can offer that nobody does. What "that" actually is something you will need to decide and come up with. Best approach would be to get customer feedback and conduct surveys to see what your customers really want.