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Fraud Prevention

Here you will find some merchants' opinions about dealing with online frauds.

I've been online for many years ... in fact we were the first automotive - marine parts supplier to have secure online ordering on the net.

Something over time we have learned is that there are many good people overseas, and then those few bad apples that force us to make drastic decisions. We all want to generate sales ... but think about the loss on one that unwinds from a chargeback.

A short list of what to look for:

- First delete Indonesia, Columbia, Malyasia, Iran, Iraq, N. Korea, Micronesia, Singapore, a few areas in Russia, and a variety of other areas from your country list. Basically, any area that has an uncontrolled terrorist or rebel group generating press. These guys have to fund their activates somehow.
- Anyone from another country that sends you a real polite e-mail saying they need such-and-such parts and will you accept credit card for payment (and a non-signature shipping method) is a scam. Ignore them! You can reply and tell them to do a bank transfer, or just send them an e-mail of your laughing.
- If your website verifies e-mail delivery you should do a WhoIS search on the domain. MANY of these are international Network Solutions accounts with a generic website just to bounce the e-mails through. These guys have applied for the domain, never paid, but the domain is on temporary status of which then can point e-mail to it for a limited time.
- Use your bank's or CC processor's security phone number or online issuing bank search to grab info on the issuer and verify billing address and other info. *Some* quality banks will actually call their client to verify the order for you ... but don't count on it. They are basically all lazy and drop the bomb right back in your lap.
- Look for stupid misspells in the order, like Eugene, OK (instead of OR for Oregon).
- There are very large organized crime groups in these countries that have systems for grabbing card numbers (or using software to generate the numbers and expirations), getting the limited time domains, and untraceable ship-to addresses that in some cases do not exist but are grabbed by a paid stooge in gov't or other agency in transit. Realize that these people are pretty good at what they do. You can also do a TraceRoute on the IP they made the order from.
- NEVER ship by untraceable methods (USPS) out of the country even though it is considerably less money. We do use the postal service, but to limited countries or customers which we have a track record.
- Do Not be afraid to ask for a money transfer either by Western Union or direct EFT. EFT is better for both, but it takes having correct bank information on both sides. We do this on new overseas customers and it does scare a few away ... others want what we have to offer and will do what it takes. If they are serious about the order they will do it. Once you have a track record with them you may decide to lighten up the restriction.
- Read Your Orders! Look for something odd like a US-based billing address and an overseas ship-to that is not military.
- Call the phone number(s) given on the order ... is the person actually there?
- If your gut tells you no, trust it. Sit on the order for a while or reply for verification information (issuing bank phone number and address, etc). Then don't just call the bank ... do a search to make sure that bank actually exists first!
- We have a large military customer base. When we get a multi-thousand dollar order for Mechanix Wear gloves to a location in Saudi Arabia (Prince Sultan Air Base) or others, we still do our homework. We always verify PO and card holder on even our military accounts just to be safe. This can be done within various departmental areas of the base even though each can be independent of the other.

We would catch anywhere from 10-25 of these fools each month trying to order stuff with bogus cards. After we yanked the guilty countries from our country list we have dropped to only a couple a month, and they are real obvious now. These fools will use the wrong country, right postal code, and other big errors to try to process the order. Most of these will get a colorful e-mail reply from me.

Remember, that if the order is military it will go through the APO to get to them so it is still basically a US address. Be wary of military too, because some are also bogus by the same offenders above trying to use the APO to get delivery.

Until the credit card companies decide to not screw the merchant we will be forced to police our own fraud. Verified by Visa is nice, but price the implementation! This should be something the Visa gives to us for free. Hell, they already rape us on fees and give nothing in return but the ability to accept credit cards. No security, everything is our fault, and chargebacks reign. Unfortunately it will take our own labor to prevent fraud against us until changes are made or laws for the protection of merchants are enacted. The lawsuit against the various credit card companies (which we are obliged to be part of) for forcing us to accept debit cards at a higher rate is a stepping stone to regulation that is good for the consumer, vendor, and CC company.

At my company we have only been hit by 4 chargebacks in 14 years!!! Yes, that is an exceptional record, but it takes a lot of effort and sometimes not fulfilling orders that you don't trust no matter how bad you want the sale.


Collect the CVV2 number... This has probably lost me countless sales but I have zero fraud since I started.

Ship to the billing address on the credit card, Use AVS to check this. Don't ship anywhere else, if they say its for there Uncle Bob make them ship it to him !

Finally get a signature.... I costs money to get people to sign for packages but any packages I ship over $100 someone has to sign for it...


2. 60% of my fraud cases have been American. Just because the address is down the street doesn't mean that it isn't a bogus order. I am Canadian doing business in Canada, and lucky enough to have never been scammed by someone in Canada. I am always on the lookout however. It's only a matter of time.

3. Anyone making an order for more than $1000 should have no issue with sending a wire transfer, especially on a corporate and/or international order.

4. Stay pro-active. You do not want to lose valid customers. If you get a bad feeling about a customer, pursue it until you are satisfied that it is legit or not. Don't be afraid to ask tough questions. Demand more information whenever you feel it is justified.

5. Never be afraid to say NO. The customer is king until he doesn't pay. Then he is just another dirt bag.

6. IMHO Good business is about making smart decisions, doing your research and getting things accomplished faster/better than your competitors. Greed, the desire to daydream of phenomenal success without hard work and get rich quick schemes always lead to failure. Stay real and remember, slow and steady always wins the race.


I did some research and I found a government site to report fraud.


Someone bought a gift certificate for $100 today... Billing address and CVV2 exact match (nothing fishy there then).

Processed card... 10 minutes later certificate redeemed for goods with a shipping address totally different to the original billing address (well its a gift certificate so still nothing too fishy)

A little later same person bought another 3 x $100 gift certificates.. Now I start to get concerned... So I call the person on the phone and amazingly its the wrong number... So I do my MSN people search and it throws up a phone number that is only one digit away from the one entered in the shopping cart (possible typo ??)... So I finally get to speak to the lady and she has never heard of me, my company and hasn't used her credit card in 3 days... So I tell her to call Amex and cancel it because someone is using her credentials...


Can I ship to another address other then my current credit card billing address?
If you are shipping to an address that is different than the credit card's billing address you will need to call your credit card issuing bank (the credit card issuing bank's 800 phone number is on the back of every credit card) and add the address where you want orders "SHIPPED TO" as an "ALTERNATE SHIPPING ADDRESS".
This will only add an extra shipping address to your credit card file. This will not change your billing address. We will then process your order once we have confirmation that your NEW ALTERNATE SHIPPING ADDRESS has been added to your credit card file.


i work for a credit card processing company for online businesses and one of the things i learned was to avoid international transactions like the plague

if you get any orders from indonesia, nigeria, greece, or turkey... avoid them like the plague, ive seen merchants get completely screwed over and i feel bad for them but there isn't anything we can do, mainly because it is considered a legitimate transaction that was run through the gateway, and it is the merchants responsibility to track his/her transactions and make sure that they are legitimate

the avs and cvv are passed through and you can reject the order at your discretion

one safe thing to do is to contact the issuing bank of that credit card and verify information from them

its better to be safe then sorry


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