CC Fraud and Best Way to Fight It?

[mhsiao45]

Hi,

I'm new to this forum and would like to get some help from some of you that have an Ecommerce online store. I've been selling online on my website for a couple of years now. I've never run into CC fraud until the last couple of months. The first one started where we shipped an item to a different address than the billing (which we've done plenty of times in the past) but then we get a charge back from our merchant and we are out of the merchandise we just shipped. Double whammy! Then, in the last couple months, we start getting all these orders where the billing and shipping address don't match so I've been weary of these orders. I'll call the number they leave, and there is no answer. I send emails and no answer. I feel something fishy here.

So my question is this. I know all ecommerce sites run into this problem, but can you all give some tips on how to at least reduce the number of these fraudulent orders? Its a pain to call and email all the people with non-matching addresses..so do you all usually do that? This is so frustrating! Sorry, had to vent. Thanks for any tips.

[JEccles]

There is really nothing you can do but be aware and cautious about orders that seem "different". A real customer will not mind your calling to verify the order, in fact they are usually grateful that you are being careful. Be cautious of "free" e-mail accounts like GMail, fraudsters will open and close them the same day. Verify the IP address is from the same area as the billing address. Another thing to watch for are orders shipping to a freight forwarder or to Miami (unless it originated from there). Also, if your shopping cart software records unsuccessful orders (ones that the charge was not approved on) and you see one or more just prior to your sale, that could be a clue that someone is trying different card numbers until they find one that works. Most of all Trust Your Instincts.

[mhsiao45]

Thanks JEccles for the reply. Can you comment on these issues also?

1. Verify by Visa and SecureCode by Master Card. Do you or anyone else have any reviews or comments you can provide about these services? Is it worth it? Do you see a higher abondonment rate b/c people don't want to sign up for it?

2. Does requiring a signature for delivery help at all? Sounds to me that it won't since the card is already charged and the merchandise is already shipped out. Sounds like all you would get is maybe your merchandise back.

[JEccles]

I'm not sure about the first issue. I do not use those services. As for the second, requiring a signature would help. There is a scam out there where the product will be shipped to an address where no one is generally home during the day and the fraudster will watch for it and then pick the box up off of the porch. It also helps for those charge backs where a customer says they never received the package...I've heard about a lot of these type of scams. they generally back down when you confront them with the signature and say that you will file a police report.

[QuikShop]

We've an article on fraud prevention which might give you some ideas. Its written for the UK market but the same principals apply.

[JEccles]

Good article. Thanks for sharing.

[marksmatter]

Let me tell you another popular scam - these guys forming relationships with women online. Then they use a stolen cc number and have merchandise shipped to the woman's address. She then forwards it out of the country, completely not suspecting that she's doing anything wrong. There's more to this scam in terms of building trust with the woman, etc. and I do not want to elaborate (i.e. give any trollers any ideas).

Suffice to say, there is a great amount of truth in what Jeccles has said. Watch for the unusual, particularly if overnight shipping is involved. Double-check your merchant account AVS settings too. You'll only find one setting is incorrect after you get burned! Also, if it is jewelry, electronics, etc, then heighten your senses.