Stolen Credit Cards Used to Purchase from My Store

Lshop2connect on 09/05/2016 - 11:43
Last edited 09/05/2016 - 14:52 by 1 other user

Hey guys,

I run an online computer accessories business. Over the past few weeks I have a received a couple orders with different names to the same address. I recently got a chargeback for one of the amounts ($500) due it not being authorised by the cardholder and thus fraud, and there are other purchases well into the thousands which will also be chargebacked too.

I tried researching this issue online and the correct steps of action to take because I shouldn't be the one responsible as I have sent the goods. I read that the merchant is responsible and the amount will be charge backed from my account. I thought this is completely ridiculous. Why is the merchant responsible for a scammer's actions? If this happens, I will be losing a lot of revenue as these purchases are multiple (around $300-$600).

What leg am I standing on now? I have the buyers information such as name, email (tried emailing no contact) , phone number (which I tried calling but disconnected), address. I had compiled all the information I had about about these orders and submitted a police report. I read another thread that if I do this, it would be a walk up start for them. However, I've read cases that the police don't bother investigating credit card fraud since they've not reached that threshold of crime yet, is this true?

I've also enabled extra verification on my orders as I don't want this to occur again as well as am in the process of enabling VBV. Is it worth calling a debt collector? . Is there anyway I can stop the extra transactions from being chargebacked? The packages were supposed to be signed for during delivery however there seems to be no signature on file and marked as "Authority to leave".

Financial

Comments

  • Cyphar on 09/05/2016 - 11:49

    Are they chargebacks due to theft? Or are they just customers being (profanity)? I assumed that where a card is used to purchase stolen goods, that the money is reimbursed, but no chargeback initiated.

    The best thing to do here is to call your bank and have them discuss what actually happens.

  • airzone on 09/05/2016 - 12:20
    +1

    Who will you call the debt collector on? The guy who had his credit card scammed? Or whoever lives / works at that address? For all you know, the postie has been intercepting credit cards in the mail and using them to send to a specific address and then he skims the goods before delivery. Or maybe the address is a factory and the goods receipt guy is doing it? Or perhaps it's a neighbour of the delivery address? Nobody can be so stupid as to use stolen credit cards to send stuff to their home.

    Talk to your bank (as mentioned), check your business insurance to see if it covers fraud, and you'll probably need to involve the police. Definitely tighten up your ordering system. I don't think there is much you can do about it now except for safeguarding future transactions.

    • dazweeja on 09/05/2016 - 12:58
      +1

      How can they tighten their order system? If people have a stolen credit card and CVV, how could they be stopped from purchasing?

      • mskeggs on 09/05/2016 - 13:23
        +1

        Only deliver to a verified address? This is why some stores want to see a scan of ID.

        • dazweeja on 09/05/2016 - 13:47
          +1

          That level of inconvenience would cost quite a bit of business, especially if your competitors didn't make their customers jump through the same hoops. What percentage of online stores where you shop want a scan of your ID? None that I use.

        • mskeggs on 09/05/2016 - 14:20

          @dazweeja:
          Agreed, but the OP mentions multiple orders in different names to the same address. I think it would be reasonable to ask for verification in those circumstances.

        • airzone on 09/05/2016 - 15:46

          @mskeggs: This is exactly what I mean.. Work out some red flags and initiate customer contact when something pops up. You don't have to check every single order, but sending multiple units to the same address under different names could be suspect… Particular if it's a residential address.

          I've had this happen to me where something's tripped up a red flag and I've had to jump through a hoop - and it's usually just a phone call.

        • dazweeja on 09/05/2016 - 18:03

          @airzone:

          Fair enough. Good point. Makes you wonder why they used different names when using the same name is actually less suspicious.

        • airzone on 09/05/2016 - 19:08

          @dazweeja: Match names to credit card numbers… If they had a half dozen, you'd need to match the names otherwise the billing processor will probably reject it.

      • Innately Incognito on 09/05/2016 - 13:25

        Several merchants check the cardholder's name and country against the ordering information and contact the customer before dispatching items. It doesn't necessarily prevent all fraud but it often helps to minimise it.

        Alternatively, I think PayPal covers you for this if you're using PayPal as a merchant facility.

        • dazweeja on 09/05/2016 - 13:55

          The US, Canada and UK have a system (AVS) where you can check that sort of stuff. I don't believe a similar system is available in Australia. PayPal does have merchant protection but it is far more expensive than normal merchant services and you would have to make it the sole credit card payment method for it to be useful in this case.

        • ronnknee on 09/05/2016 - 14:34

          @dazweeja: What are the merchant fees like for Mastercard/Visa? I know for PayPal, it can be as low as 1.1% depending on the monthly revenue.

        • Innately Incognito on 09/05/2016 - 16:52

          @dazweeja: I'm fairly sure eWay allows you to see this information but I might be wrong. PayPal fees as mentioned below can be quite low if you are processing the volume.

  • dan0909 on 09/05/2016 - 12:59
    +3
    1. Make a police report, you will need police report number when you make an insurance claim.
    2. If your business insurance does not cover it, change the insurer. Sometimes your payment gateway (like EWAY) can issue refund.
    3. Speak to the bank, I am sure it is perfectly fine for the banks to take the money back from you (it must be in a fine print somewhere in their terms). If you don't get money fro banks then see if there is an ombudsman (sorry I don't know who or which one) where you can say you are not at fault and should be paid.
    4. Can something be done to the payment process to improve security? The default (cheapest) payment gateways are not that great when these sort of things happen.
  • altomic on 09/05/2016 - 17:05
    +1

    Bikies

  • Geewhizz on 10/05/2016 - 06:01

    Is there any way of checking whether the address of the cardholder is the same as the address you posted to?

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