Fraud - Ship to Country Wrong

[cw1865]

Have seen a couple of orders come through which were fraudulent. Figured I would post here so that other members can see the pattern.

On my system, I specifically block countries known for fraud.

One order had a US billing address and a ship to with a Malaysian address, indicating the country as 'Iceland' -- the second order had a Vietnamese shipping address with a country listed as Japan -- a third listed Singapore when the address was in Malaysia.

Apparently from what I have read, the postal organizations in these countries are apparently diligent enough that if they see a package like this they will actually forward it to the real country (?)

Santa may check his list twice, and we would be wise to do the same. In a holiday of gift giving where different a different 'ship to' address is common, make sure to take the time to give some scrutiny to foreign orders and gift orders.

[davidmg]

Ship to USA only. Yes we are in a global economy but we have chosen to keep our base to the USA only. Daily we get inquiries from the fraudualnt countries. They even tell us that they will have their freight company pick up the merchandise. We have recieved huge checks in the mail (that were fraudulant and have turned them over to the police). If you choose to ship out of the country you are at more risk than just the USA.

We have even had problems with shipping to Canada. If the customer does not pay their taxes on arrival you get billed back for them. If you accept paypal or google checkout you can't collect this back from the customer if they refuse to.

Be careful once it leaves your warehouse it is not yours.

[advancedmerchant]

I agree with davidmg. We removed the "Country" field from our shopping cart, and made "State" a pulldown, allowing only valid states. Zip code must be 5 numeric digits, etc, so we cannot even get an authorization from a NON-US cardholder.

We provide merchant services, and if I told you how many merchants in this country get ripped off by experts in Indonesia, Eastern Europe, (actually everywhere nowadays), you would turn blue.

If a customer from outside the US wants it badly enough, go to Western Union's website, locate the nearest branch office to the customer, and tell them to go there and wire you the money... BTW- Postal Money Orders / Cashier's checks? How many copies of phony ones would you like to see? Some even good enough to fool the Post Office and/or Bank.

[cw1865]

I think that solution is a little draconian. I export a lot and while I keep my eye on the fraudsters my experience exporting has been profitable and generally free of fraud. While I agree that foreign transactions pose a greater risk for fraud, the gain from even English speaking countries (UK/Canada/Australia) is still well worth the risk.

I permit First World Countries and exclude 2nd and 3rd World.

[sharonjackson]

Originally Posted by cw1865

I think that solution is a little draconian. I export a lot and while I keep my eye on the fraudsters my experience exporting has been profitable and generally free of fraud. While I agree that foreign transactions pose a greater risk for fraud, the gain from even English speaking countries (UK/Canada/Australia) is still well worth the risk.

I permit First World Countries and exclude 2nd and 3rd World.

I agree with this writer.

As a Canadian who frequently buys product from the US, I would hope that you would look for better solutions than to merely pulling up the drawbridge. I would understand if you needed a waiting period for a check to clear or a credit card to be authorized or something...anything- even a surcharge.... But several times I have tried to purchase from US sites that do not permit purchases from Canada.

This means I seek out another company that WILL accept Canadian orders.

Please don't cut off your nose to spite your face!

[advancedmerchant]

We do accept industrial orders from Canada and a few other countries, just NOT online. If you wanted to order our product from Canada, you would have to order via phone, where we could collect additional data to do adequate fraud scrubbing.

Websites that accept international orders for high ticket and easily resellable products are fishing for the fraudsters. It is a sorry situation, but that is the reality of it. A web store that is easy to use for domestic clients simply does not collect enough data to do adequate fraud prevention for International sales. Conversely, an order form that does collect sufficient data to do fraud prevention is unwieldy and unusable by your domestic clientele. Hence, the "Phone only" policy for International orders that we have adopted.

[sharonjackson]

I see your point. Thanks for the explanation. It must be very difficult to tell the difference between a fraudulent order and a viable one. I know that even doing work for customers on the other side of the country can be stressful...they don't live down the road, so if you cut them some slack and then try to collect payment later, it can be dicey.

[ron angel]

Originally Posted by advancedmerchant

We do accept industrial orders from Canada and a few other countries, just NOT online. If you wanted to order our product from Canada, you would have to order via phone, where we could collect additional data to do adequate fraud scrubbing.

Websites that accept international orders for high ticket and easily resellable products are fishing for the fraudsters. It is a sorry situation, but that is the reality of it. A web store that is easy to use for domestic clients simply does not collect enough data to do adequate fraud prevention for International sales. Conversely, an order form that does collect sufficient data to do fraud prevention is unwieldy and unusable by your domestic clientele. Hence, the "Phone only" policy for International orders that we have adopted.

I see this sort of thing from the Buyers point of view. I recently bought some computer eqipt the spec of which was not exactly as I required available in the uk I saw an advertisement in a on line copy of a computer magazine.so instead of ordering via shopping cart I telephoned the company.Two reasons one to find out if it was described properly would do what I wanted & the guy at the other end was technical enough to answer my questions to engineering level not just usage. He was & I was convinced that they were genuine at the good price asked. the next thing was to ask if they had European distributors as I am in the UK. they did not & the bulk price was only about %5-8 less than single units,so no con. they had no distributor so I ordered on the spot with credit card got unit about a week later. this safeguarded me as the credit card company would have refunded my money & would probably not let the charge through if they suspected anything was wrong.

[BluePlanet]

Although my sites do not sell products from the U.S. for overseas shipment, in part due to the high level of fraud and the general hassle of it. I also sell fairly low priced products so it is not much of a hit on sales.

If you sell more high end products and ship them overseas, I would take additional steps beyond the credit card payment. I would call and confirm the order and request a signed purchase order to be faxed. This would not be a problem in business to business sales. In consumer sales I would call and confirm the information. Chances are a fraudster will not have a valid number or be able to properly confirm the order.

It works the other way around, so customers should expect it. One of the little things I do is a news distribution wire service which is only $35 and people call us all the time to see if we are for real, still in business, etc. This corporation has been offering this service for over ten years.

[confettiguru]

Well you just scared the crap out of me. I've been shipping Globally but occasionally get a weird request. It's ususally someone in Nigeria who wants a weird quantity...like 10,000 packets of Snowflake Confetti. I do trust my gut and decline orders that sound too good to be true.

Since reading this thread, I just changed my checkout to prohibit all sales outside of the US except, Great Britain, Cananda and Australia.
We do a lot of shipping to Canada and. knock on wood, have not had any problems at all.

[carlking]

I was born and worked in the U.S. most of my life. I chose to retire to the Philippines. I have maintaned a U.S. billing address for 7 years because i took my credit cards with me. I think it is pretty normal for retirees or even internet marketers who like to bum around the world with their notebook. 100,000 thousand Americans live here, some of them with millions of dollars. You don't want their business? Maybe you would like to stop selling digital products because sometimes they get posted on warez websites?

[ron angel]

[QUOTE It's ususally someone in Nigeria who wants a weird quantity...like 10,000 packets of Snowflake Confetti.

The mind boggles, a black market in Snowflake Confetti.
I can just see this guy in a small village in the middle of nowhere in Africa coming out of a doorway and saying to the local vicar" you want to buy some Snowflake Confetti very cheap".....
Believe it or not the most saleable stolen or otherwise item in the world is Not drugs, it is Razor blades! Think about it, in third world country's everybody uses them there are no serial numbers on each one so very difficult to trace & prove stolen. the penalty if caught would be very low & you could probably bribe a police man with a box of them in a third world country to look the other way.

[chandrika]

Paypals protection policy is quite good. I sent some goods to a guy in the UK recently, all seemed normal until he contacted me to say he did not receive the goods. He said that the parcel I sent was empty, but I had the postage receipt that included the weight of the goods that proved I had sent them.

I will never know whether he was trying it on, the Post Office thought he was and would not pay up on the insurance I tried to get for him, claiming that he signed for them, but he said the signature was forged.

So then he reversed his credit card payment that I received via Paypal.

Paypal dealt with it realy swiftly, I just sent them the postage records and they covered it, which was good. It did not take long either, I was pleased how they handled it.

That was lucky that it was to be sent to a confirmed address, I suppose over Christmas it is more likely somene will ask you to send to a different address for gift purposes. I would not send anything worth over about £25, I will only send to confirmed addresses usng a protected service like Paypal, as I did in the past lose quite a bit sending a parcel to an Indonesian unconfirmed address, usually people like to give a gift in person, not have it directly delivered, so hopefully it will not come up too much.

[cw1865]

Originally Posted by carlking

I was born and worked in the U.S. most of my life. I chose to retire to the Philippines. I have maintaned a U.S. billing address for 7 years because i took my credit cards with me.

This scenario is not unheard of - Americans in the Phillipines....

Originally Posted by carlking

I think it is pretty normal for retirees or even internet marketers who like to bum around the world with their notebook.

Yes, its normal for the retirees, but its not THAT common for US Based merchants. You said - '100,000' Americans - ok, but here in the US there are 300,000,000 people. AS A PERCENTAGE OF THE WHOLE, the 100,000 is insiginifcant.

Originally Posted by carlking

100,000 thousand Americans live here, some of them with millions of dollars. You don't want their business?

Yes, actually I do want them, but I am going to scrutinize that order. I had one from an American working in Germany (non-military) shipping to California. The IP Address was out of Europe, the billing address was California and the ship to was his brother at some other address. The e-mail address was a .de......Did I ship? Yes, I did, but I did scrutinize the order, I saw the customer's name on a company website, spoke to the brother, etc.

In the case of the Phillipines, the cost of UPS is going to prove cost prohibitive. Millionaires or not, I'm not mailing anything there.

Originally Posted by carlking

Maybe you would like to stop selling digital products because sometimes they get posted on warez websites?

What's a 'warez' website?

[ron angel]

What's a 'warez' website?[/QUOTE]

Warez - Wikipedia, the free encyclopedia

[confettiguru]

Originally Posted by ron angel

[QUOTE It's ususally someone in Nigeria who wants a weird quantity...like 10,000 packets of Snowflake Confetti.

The mind boggles, a black market in Snowflake Confetti.
I can just see this guy in a small village in the middle of nowhere in Africa coming out of a doorway and saying to the local vicar" you want to buy some Snowflake Confetti very cheap".....
Believe it or not the most saleable stolen or otherwise item in the world is Not drugs, it is Razor blades! Think about it, in third world country's everybody uses them there are no serial numbers on each one so very difficult to trace & prove stolen. the penalty if caught would be very low & you could probably bribe a police man with a box of them in a third world country to look the other way.

It is weird: that's why I questioned it. Usually big Confetti orders are for movies, sporting events or concerts. One of our biggest this year was for the Stanley Cup final game...600 pounds of red and white confetti.
Even with that I double checked the name on the credit card...turned out to be a VP at Detroit Redwings.

[getmea]

I have sold to Australia and Brazil with no fraud issues. I occasionally get shipping quote requests from New Zealand with a Bali address. I reply back to them asking to correct the address, but I never hear from them again. One time, a guy gave me 3 credit card numbers to run through (any international order is run manually) which all were refused. I stopped communciation with this guy.

Chandrika made a good comment about selling through Paypal...it's FAST and SAFE (no, I don't work for Paypal).

[amxfan]

I'm glad that I am not the only one out here seeing an increase in fraudulent charges. A few months ago I typed up here on WPW a very brief list of tips that will help counter and fight against this issue. Since I posted that, we have taken additional measures over and above what is probably needed, but in doing so not only did we reduce dramatically our number of fraudulent charges, we have also gained a strong customer loyalty. There are many countries out there that do not support AVS and there are free tools out there that can be utilized to help protect against US fraudulent orders. I am going to provide here means that we use to help fight this. I am hoping that other merchants will do the same and provide what steps they have taken to help fight this. We have given up with trying to report possible "Code 10's" via the 800 number for Visa and MasterCard due to the last time we called we were suspicious of a transaction due to where the order originated from as indicated by the ip address. When we got someone on the line, after calling the 800 number, we were shocked while trying to explain to the representative of our reason for belief that it was fraudulent that they did not know what an ip address was. We moved on and requested to speak with a supervisor. When the supervisor came on, we asked them if they knew what an ip address was, we were astonished when they had no clue. This is one of the reasons I am responding here. Visa and MasterCard are out to protect customers only and could not give two hoots about the merchants losing money and product, so we had to find other means. I am hoping again that other merchants will join in and tell us what they are doing to fight this growing issue in these hard economic times.

Many gateway providers like Authorize.net offer fraud protection. We have looked into this seriously. We are sure that their protection will help, but using free tools you can go beyond what Authorize offers and protect yourself. Here are a few tactics that we use.

1. As stated not all countries support AVS. To help counter this you may want to add a required field in the cart and request the 800 number that is listed on the back of the card. Most people, if they do not have card in hand, will not be able to get this number and will leave your site if the order is fraudulent. The phone number that you are requesting is the phone number to the bank that issued the card. You can call this number to verify the information provided to you.
2. I stated this before, and I will state it again here as it is one of the most valuable tools in your arsenal. When an order comes in to your email, make sure you log in to your gateway and check to see if there were any failed attempts to purchase before the approval. A red flag ought to be raised if you see 1 or 2 failed attempts prior to the approval. Part two of this is look at the ip address. We use http://www.geobytes.com/IpLocator.htm?GetLocation to help check this. If you get an order with the billing address in Florida, shipping to California and the ip says it comes from anywhere but Florida or California, you may want to investigate it further.
3. Another free tool "we do have an account though" that is mostly forgotten is the white pages http://www.whitepages.com/ . We find it very benificial to pluck in the persons name, address, or even do a reverse lookup on phone number to verify. If the person is listed in the white pages, that person has lived at that address for a little while. You can also use the white pages to sometimes obtain the phone number of the card holder at the billing address. You do not want to call the phone number provided to you on your order receipt, but if you are able to get a phone number through the white pages, that is the number you want to call. We have on many occassions contacted people by this means, explain to them why we are calling, stating we wanted to verify that they placed the order. We have gotten nothing but raves from our customers for doing this and found our customer loyalty has gone up dramatically. We have also called customers to verify the order only to have the customer add to the order since they had us on the phone.
4. We have found that most fraudulent orders come from Indonesia and Singapore and have been informed about South Africa but have not seen this. We do not waste our time in shipping to these countries.

We are at this point in time actively pursuing through letters to governors, congressmen, banks, etc. for additional means of verification that is not currently supported. What we are requesting is to be able to ask for the drivers license number and DOB and be able to have the gateway verify this information. Basically to stay within the laws and limitations in asking for this information, this information would be treated the same as the CSV on the back of the card. If you look, if you have Authorize, you will see a field in your receipt for this information, but the system is not in place yet for verification. If you feel as we do that this will help, we urge you to pursue it as we are. Stores ask to see your drivers license at checkout, why can't we? I hope this helps a few people. It does take time to do it, but the rewards may not only be limited to the savings from the chargeback and loss of product, but you might also see your sales increase due to your customer loyalty.

[getmea]

RE: tip #2: When I subscribed to Authorize.Net, I coded a function which emailed me when an attempt was rejected. The email consisted of customer information as well as the return codes of the attempt.

[cw1865]

Originally Posted by amxfan

3. Another free tool "we do have an account though" that is mostly forgotten is the white pages WhitePages - Find People for Free and Connect with Confidence . We find it very benificial to pluck in the persons name, address, or even do a reverse lookup on phone number to verify. If the person is listed in the white pages, that person has lived at that address for a little while. You can also use the white pages to sometimes obtain the phone number of the card holder at the billing address. You do not want to call the phone number provided to you on your order receipt, but if you are able to get a phone number through the white pages, that is the number you want to call. We have on many occassions contacted people by this means, explain to them why we are calling, stating we wanted to verify that they placed the order. We have gotten nothing but raves from our customers for doing this and found our customer loyalty has gone up dramatically. We have also called customers to verify the order only to have the customer add to the order since they had us on the phone.

That is a good tip!

[getmea]

Originally Posted by cw1865

That is a good tip!

RE: Tip#3 - Whitepages.

Great tip! Instead of Whitepages, I used Zabasearch. I once searched zabasearch because an order was suspicious. I called the number on file and it turned out a kid used his grandmother's credit card without permission. She very much appreciated the verification. I lost the order, though...

[cw1865]

Originally Posted by getmea

I lost the order, though...

Well, if you think about it; you didn't have it to begin with.

[amxfan]

Originally Posted by getmea

I lost the order, though...

While it is true you never really had the order to begin with. You can also look at it as you saved yourself the $25 in chargeback fees and also did not lose any products. Although you may have shipped the items insured you may NOT be able to claim the insurance. People have 18 months to file for a chargeback while you only have a maximum of 12 months to file a claim for the insurance, so depending on how long it took them to dispute the charge, you may have been out both.

[getmea]

Originally Posted by amxfan

While it is true you never really had the order to begin with. You can also look at it as you saved yourself the $25 in chargeback fees and also did not lose any products. Although you may have shipped the items insured you may NOT be able to claim the insurance. People have 18 months to file for a chargeback while you only have a maximum of 12 months to file a claim for the insurance, so depending on how long it took them to dispute the charge, you may have been out both.

Never looked at it that way...thanks!

[sunnyshine]

I avoid to ship to the risk countries like Ghana, South Africa, Malaysia or China.

[pixma85]

I use mainly google checkout which insures up to 300 if its over 300 I am a weary of shipping the order out another country