Comments on: 30 Second Fraud Checklist for Ecommerce Merchants

By: keith

keith — Tue, 21 Jun 2011 18:31:52 +0000

These are the things in my new agent welcome package that are listed to watch out for

blank Schedule of fees

Contracts Cancellation fees

Annual fees

Partial Application with no schdule of fees

Small Companies with no track record

No phone systems home answering machine

Companies that do not list wquipment prices on their sites

Companies that outsources customer support and deployment

By: wiserNow

wiserNow — Tue, 11 May 2010 18:58:46 +0000

Double check orders from customers that use pseudo domain email addresses such as auctiva and ecrater. They’ll put the name from the stolen credit card in the email address to make it look legit but really they get email to anything@pseudodomain.com. Here’s the scam. They have an auctiva or ecrater website but no real inventory. When a customer orders, they order from legit merchants using stolen credit cards for which they have ALL the billing address information and CVV. They use a pseudo domain email address so they get the shipping tracking number and can forward it to the customer. The customer ends up with stolen merchandise and you can’t shut down the fraudulent site because the police departments in the various states want you to report in person. VISA does nothing because they make more money on stolen credit cards because of the additional chargeback fees. We now check IP address against billing and phone the questionable ones because the number usually not real but close to the credit card victim. Here’s one site that defrauded us out of hundreds of dollars: http://meranski2519.ecrater.com/

By: Merchant Data

Merchant Data — Mon, 26 Apr 2010 14:20:04 +0000

Great information! Thank you for your hard work on this blog… I’ve referenced a number of our customers to your web site.

By: Merchant Data Systems

Merchant Data Systems — Wed, 21 Apr 2010 16:45:55 +0000

Agreed, excellent post! Fraud is definitely a big problem within this industry but it’s important that you find a merchant company that can protect you and your interests.

By: Goose

Goose — Tue, 13 Apr 2010 19:49:53 +0000

Thanks for posting this up. It’s always really important to know what to look out for when you suspect a fraud. Your article had a lot of valuable information.

By: jestep

jestep — Mon, 12 Apr 2010 23:09:57 +0000

Let’s say you have a product that cost $100 and you sell it for $100.

What I’m referring to is losing the money when the real cardholder makes the chargeback (-$100). If you also shipped a product, you’re out the product as well, which you now need to replace (-$100).

This fraud cost you $200 to refund the card holder and replace the product.

By: pegr

pegr — Mon, 12 Apr 2010 19:45:48 +0000

Um, no, you don’t lose twice when you are scammed. You lose the product.

If what you said was true, you’d lose the product every time you made a legitimate sale.

By: Green News

Green News — Thu, 25 Mar 2010 20:43:33 +0000

Thanks for the great post. Best wishes on the continued success of your blog. I’ll be back for updates often, you have a new reader.

By: Paul

Paul — Mon, 22 Mar 2010 14:08:06 +0000

While each of the 10 points you list indicate a slight increase in the risk of fraud, they do not indicate a probability of fraud, with the exception possibly of #6. This distinction is important, because if you treat everyone who wants to ship to a different address than their billing address as if they were a criminal, you’ll end up with a lousy shopping experience for the 99% of customers who are legitimate (especially at Christmas).

Or, to take another example, purchase of uncommon items is actually very common on the internet, precisely because they are hard to find in traditional stores. Or, looking suspiciously at overnight shipping as a red flag — often I buy online because I’ve run out of time, and if I don’t have it shipped overnight, I’ll miss a birthday or an anniversary. Does that make me a suspected fraudster? If you don’t get it to me overnight, I guarantee you’ll never see me darken your virtual door again.

The real problem that you face with CNP fraud is that many of these very things you want to flag as suspicious are the exact behaviors that your best and highest value customers exhibit. In fact, it frustrates me no end that I am caught up in bad fraud screening at least 4 or 5 times a year. I spend 10s of thousands online annually from travel to gifts to electronics to subscriptions to furniture, yet get rejected or pushed back, sometimes even called for additional information a surprisingly high percentage of the time.

Simplistic rules of thumb, and even simplistic fraud screening tools are not the way to go for a merchant who is trying to build their business and earn enthusiastic customers. This list reminds me of the nightmare that is airport security — we pay billions for useless procedures and people and equipment that are mostly unnecessary, and all that happens is that the legitimate passengers end up annoyed, late for flights and running through airports with no belts or shoes and computers falling out of unzipped bags, after overzealous rent-a-cops frisk you in places that you tell your kids not to let strangers touch.

The simple fact is that the terrorists have won — they have changed our lives irrevocably. Will merchants allow fraudsters to win in the same way? Will you make the online shopping experience so unpleasant that your best potential customers refuse to do business with you?

By: Heru Kurniawan

Heru Kurniawan — Mon, 22 Mar 2010 08:22:28 +0000

I am really like to read some articles in your site. I got a lot of information from you. So, I have bookmarked your site.

I like no 7..
Granted, an enhanced AVS validation would not help much with account takeover or identity theft (in cases when a new account has been opened), but in other cases I could see it taking a serious bite out of fraud. Since most of the burden of such a program would rest on the shoulders of the major Visa/MC issuers, do you think they’ll consider it? Do you think the card associations will ever sponsor such a system?

I don’t know about you, but I think it’s about time to retire AVS and use something a little beefier in its place.