We have seen a real uptrend in fraud recently.  Most of it was caught before the items were shipped.  However we did lose about $700 on a couple of orders that slipped through the cracks.

The biggest problem is shipping items to a different address than the credit card.  Since much of our business is B2B we cannot install an address restriction. We would lose too many sales.

I was wondering if other people are seeing this trend? Also, are there other things you might suggest to increase the security.

Thanks

Two months ago we joined an affiliate network, one month later we had an avalanche of orders from one affiliate. Really suspicious looking ones - nothing like our average orders of 7 years of doing e-com biz. Fortunately I was all over it right away and managed to void out about 95% of the 20k in orders before they posted to the consumers cards. Had to get the FBI involved to CMA. Really slick operation there. Was lucky to catch it before it was too late.

We also get the occasional consumer fraud. Non-receipt claims even though we have usps delivery confirmation, so we have to deal with chargeback hassles. We even had one two years ago in the Bronx (nyc) for $400, she claimed she receivd the box but it was empty with no visible sign of damage. When I asked for the box for US Postal inspection she had conveniently thrown it away. That one was my favorite scam of the year!

Specific to your issue, we don't get very many alternate mailing address requests on our orders. Have you checked with the merchant bank/processor to see how to handle this issue? They have teams of staff on hand to advise merchants on how to reduce theft and chargebacks. I would start there.

Good luck!

We get a lot of these "Different Billing from Shipping Addresses" Most of this is Government or B2B customers. We handle the incoming very differently (and probably very slow compared larger) companies. On AC we are now using PayPal Payflo which is verifying more than we used to. We only authorize each charge. The orders download into our Order Management Program and we manually allow each one into the process flow. This way we can look at each order. We cancel several orders right off the bat that look fishy to us. We have several items that are hot ticket items for the black market.

Our classic fishy list is:

• Overseas (although we ship every year to over 50 countries, we stay away from Indonesia, most of Africa )
• Does the email address match the country.

• High dollar amount were we have not listed a quantity discount (Wouldn't you want a discount if you were buying 50 expensive items, instead of just one?)
• Air Shipping (FedEx or UPS Expedited etc.) shipping as fast as possible.
• A free email address
• Business order but Shipping address is a home (check Google maps)
• Freight forwarder is in Florida or billing address is in Florida.

We look at a great internet order coming in but it is just out of the ordinary (either product, quantity etc. location) and we will set it aside for about an hour and look it over again to see if it looks fishier. We don't mind picking up the phone and an email to ask some questions.  You get a lot on non-existent email addresses and phone numbers. If we don't get answers we like to make us happy, we let the order sit until someone calls us for the status of the order. If the order is that important then they will call.

We usually get burned know about once every 3 years for about $500.

 

 

 

---

Steve Hull
CMS, Inc.
Http://www.SafetyStore.com Http://www.AllThingsFirstaid.com
And many more

We have seen an increase in fraud as well.. 99% of the time it is a different shipping than billng address. We put the following text on our checkout page to try and dissuade fraudsters form placing order, as they will be unlikely to use their real telephone # to be contacted

In an effort to prevent online fraud, we require telephone confirmation for all orders over $1000.00 that are not shipping to the Billing Address. Once you place your order, you will contacted by one of our sales representatives within 24 hours to confirm your order.

I havent measured it metrically to see any decline in faud rate, we definitely still get fraud orders that we check up on regardless

---

Article on Me & Americommerce

http://www.fraud.org/tips/internet/ can help you to prevent internet fraud by giving you tips

---

internet-merchant-account.html

We had a B2B customer place a $2000 order for overseas.  Not unusual, neither the overseas nor the amount.  We have over 200 retailers in about 20 countries.  But this order struck us as odd...it was like 10 or 20 of every item.  No retailer orders in such perfectly even amounts.  And they wanted Expedited Overnight Shipping.  I emailed and asked him to fax me his passport, the front and back side of the card.  He did so.  We called our credit card company who told us to call the cardholder's bank.  We did so, calling a bank in China (thank goodness they pretty much all speak English!)  No one was willing to "break confidentiality" to verify this cardholder.  It wasn't that they couldn't, it was that the banks Would Not.  Very frustrating.  In the end, we cancelled the order and never heard from the guy.  99% sure it was fraud. 

 Later we asked our bank what to do, since we as retailers have very few rights with the credit card companies.  Their answer?  The ONLY way to be absolutely certain is to get a money wire.  Money wires are very hard to fake and our bank (Chase) was unaware of money wire fraud.  I'm sure it can happen, and probably does, but this was their recommendation.  Should we ever again have a large, questionable order, we'll ask for a money wire.

 I do really like the policy of personally calling large orders to verify.  Good rule, that.

I have to concur, I have family with a company that does some international business and their policy is 100% wire transfer on any overseas order over a certain amount, their threshold is pretty small even.  That usually weeds out the scammers, anyone that is not willing to at least contact you about the policy nor willing to do the wire on anything substantial will likely be fraud.

From my experience and readings wires are flat out undeniably guaranteed.  Once wired in, there is no way that money is not yours nor can be taken back out.  If there was any fraud, the sending bank is the one liable and the wire money remains with the holder.  

It's a good policy that allows you to still have international sales while protecting you from fraud.  Wires are more cumbersome for your customers so it likely depends on your average ticket size and international volume if a 100% wire only policy can be put into place.

Personally I think a card up front, then a strong suggestion that you want or prefer wires to all international orders and wait for them to respond so that both of you can at least dive into the options they/you may be aggreable to will weed out 90+% of the fraud.  Then only take wires on large amounts, period.  That protects you pretty reasonably IMO.

---

Ed Sturrock
Co-Founder, VP of Product Management

Bongo International provides international shipping as well as credit card verification services. I use them on my website. As far as international orders go, I only accept bank wire transfers. If the customer is not willing to do a wire, then it's fraud.

I have had orders within the US where an international card was used, these orders also have a high degree of fraud rates. I have eliminated the shipping to a different address option, instead customers must place these orders over the phone. Ship to a different address orders, are also high in fraud rates. 

A month ago I had a fraudulent order via discover, got nailed for $762. I was really busy at the time, and totally missed it, had I been paying attention I wouldn't have shipped the item. The order went to Avenel NJ. I ended up hiring a private investigator for $250 to go collect my merchandise, and I got it back. The fellow who "claimed" someone used his credit card was in California. He called me within 2 hours of the order being delivered in NJ. What got me was the fact that he knew the order was delivered to an apartment building in NJ, yet he lives in California. That is exactly what he told me on the phone when he called me, I had never given him that information! I reported this to PayPal in the dispute, which I technically did not dispute because I had recovered my merchandise. The order was placed with a Discover Card, via my PayPal virtual terminal, so it wasn't a PayPal order, however PayPal is the mediator when that happens. After speaking with PayPal, they told me that they had made Discover aware of the situation, yet to this date, they have yet to hear back from Discover. I wanted to go after this guy, even reported the "theft" and completed a police report. Given the pathetic response from Discover, I figured that it wasn't worth me spending $$$ on an attorney to nail this scammer.

I find it funny that the credit card companies are always complaining about fraud and how they get hurt. I have yet to hear from a merchant that got a refund when they got nailed by a scammer. So I have no idea what the credit card companies claim their loss to be, from this end it seems that we are the ones who get hurt, because we are the ones that are out of the money, and out of the merchandise. That's why I hired the PI to recover the merchandise, at least I was out $250 instead of $762. A loss no matter how you look at it, but at least it wasn't the full amount. I learned my lesson on this one.

---

Best Regards,
Louis
TackleToyStore.com

Lois,

I completely agree. We are the ones who eat the expense on any fraud order, and unfortunately with Paypal in regards to eBay items, we lose out if a customer even claims it was different then advertised. I don't know where these companies are losing their money, we are the ones who foot the bill.

-Brian

---

Article on Me & Americommerce

Louis, We all feel your pain. I have lots of stories too. Two holiday seasons ago, a $500 skin care order goes to the Bronx. The day it was deleivered, we get a call from the customer. They got the box but there was nothing in it....and no visible sign of tampering. So, knowing immediately she was going for fraud, I told her to keep the box because I would have the Postal Inspector pick it up and look for clues. Of course, she claimed she thew the box away. So what was I gong to do? I issued a credit and was out my cost, merchant fee, plus shipping. Ho ho ho...lesson learned.

 If the general public knew how easy it was to scam merchants, we would all be out of business. We get no support from the credit card industry. Only advice on how to reduce fraud. But when it does happen.....we are hung out to dry.

 I love your PI technique though! I will remember that for the future.

Happy Holidays and good selling...

Richard