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How we lost thousands on credit card payments!

Discussion in 'Payment Processing' started by ZackP, Aug 25, 2016.

  1. #1
    So we lost thousands on fraudulent on-line orders in last 3-4 months. Were using Beanstream then Elavon and now we are back to PayPal as processors. We believe that first two were big contributing factor to overall situation. Elavon closed our account without warning after some 2 months being with them. We are still paying for chargebacks created at that time span. Things calmed down after we got back with PayPal.

    How crooks did it? Quite easily in 3 ways:

    1. Using stolen credit card numbers and shipping to their address
    2. Using friend's credit card numbers and shipping to their address
    3. Using their own cards, get package to own address and after that claim that they never ordered anything like that

    In all cases everybody kept what they ordered. In only 1 (one) case lady called in and asked why did we send merchandise to her. She returned box back, we refunded immediately full amount. All were physical goods, delivered by Fedex and signed by recipients at those addresses. And don't forget that above is possible since processors get transactions approved by card holder's banks based on valid CC numbers only. AVS check in North America is not determining factor.

    So you may ask yourself, WTF, committing a fraud and getting merchandise to your own address?! Who would do that? They do, counting on fact that police will not get involved in fraud of few hundred dollars. Cardholder banks also don't get involved except fighting a merchant until we pay through chargeback. Visa, Master and Amex also don't do anything in order not to "upset" cardholders.

    Obviously in this picture merchants are left out to lose money. We now use third party services who analyze purchasing data and determine if purchase is fraudulent or trouble in making.
     
    ZackP, Aug 25, 2016 IP
    billzo likes this.
  2. moneytalksback

    moneytalksback Peon

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    #2
    Zack,

    Was there any fraud scrubbing measures enabled with Beanstream or Elavon? Usually they can block by IP if it's coming from a certain user or location, especially if the user was on a blacklist prior.
     
    moneytalksback, Aug 26, 2016 IP
  3. ZackP

    ZackP Greenhorn

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    #3
    Hi, yes, filters were enabled, AVS as well but it came down to fact did credit card used have funds to get charged or not. Only after first chargeback you could discover that in most cases cardholder is different person from crook who ordered parts. They could even be connected but there is no way to prove it. Cardholder claims fraudulent transaction, gets money back from merchant and we remain holding a bag
     
    ZackP, Aug 26, 2016 IP
  4. fionix

    fionix Well-Known Member

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    #4
    fionix, Aug 30, 2016 IP
  5. ZackP

    ZackP Greenhorn

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    Thank you for lead. We are using https://signifyd.com and are quite happy so far. They also analyze orders in real time and provide risk assessment. Too late for things that happened initially ...
     
    ZackP, Aug 30, 2016 IP
  6. ZackP

    ZackP Greenhorn

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    #6
    Last week received 4 letters from Elavon saying they will take about $1300 from our bank account due to lost charge backs. They sure did it same day + $25.00 per case since we "lost" disputes.
    Hope this is very last that we heard from them.
     
    ZackP, Sep 25, 2016 IP