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Thread: Fraud Orders
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08-16-2011, 01:57 PM #1Aspiring Evangelist
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Fraud Orders
We have recently started seeing a very large inflow of fraudulent orders – wonder if others are also seeing this – perhaps we can all get together and come up with ways to battle this …
Any suggestions?< < E Z Z I . n e t > >
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08-16-2011, 02:04 PM #2WHT Addict
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How many are you getting? I usually get maybe 1 a day, nothing out of the ordinary.
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08-16-2011, 02:26 PM #3Managed Service Provider
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You probably had 1-2 get through and now they are slamming you with more.
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08-16-2011, 02:43 PM #4Junior Guru
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What Ryan said. We had this happen last month. Two got through that looked completely legitimate and was processed and activated. After that we got like 10 more within a week, but we caught those. You just have to scrutinize everything about the orders. What alerted us to it was the person used the same secret question and answer for every account they tried to open.
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08-16-2011, 04:39 PM #5Web Hosting Master
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Are they using proxies to make the orders?
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08-16-2011, 04:50 PM #6Corporate Member
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Ask all customers to sign and return your T&C and provide ID. You'll turn away maybe 1% of legit orders (some people don't like to show ID) but you will also eliminate near 100% of fraudulent orders. Losing 1% of legit customers is worth it IMO, the problems associated with fraud (charge-backs, SPAM, network abuse etc) are costly.
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08-16-2011, 04:53 PM #7Eternal Member
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Asking for signed terms and service + ID may be a bit extreme, but I suppose it's not a bad method.
At the minimum, you might want to start voice verifying orders. Most customers shouldn't have a problem with that (in fact, I doubt any will).MediaLayer, LLC - www.medialayer.com Learn how we can make your website load faster, translating to better conversion rates for your business!
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01-31-2012, 03:16 AM #8THE Web Hosting Master
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I agree, and that is what we do. When you call you can even make it just sound like good customer service, saying you're calling to see if they have any questions, clarify anything about the order, etc. and ask them to confirm some data. Then you've made the customer happy that you took the trouble to call them, while you now know it is a legit customer.
Note: That is of course part of a comprehensive system, not a complete solution by itself.Last edited by KarlZimmer; 01-31-2012 at 03:20 AM.
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01-31-2012, 11:43 AM #9Web Hosting Master
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02-22-2012, 06:43 PM #10IOFLOOD.com -- We Love Servers
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02-22-2012, 06:52 PM #11Web Hosting Guru
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08-16-2011, 05:07 PM #12Web Hosting Guru
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We receive 2 fraud orders a day on creditcards, we wait for 2checkout fraud check but sometimes it pass fraud checks and the next day we receive the charge back so we wait 24 hours on creditcard customers and 98% of them are aware of this problem and they are ok on waiting, paypal customers get activated instantly.
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08-16-2011, 05:16 PM #13Corporate Member
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We experienced the following with a PayPal order, which is why we started requiring ID:
- customer called our office, discussed custom setup for over an hour
- client paid via paypal high $x,xxx amount for 8x SAS, dual proc, high RAM, RAID, dedicated gigabit server setup
- customer IP geo location matched phone number area code
- call back to the client answered promptly
- custom hardware ordered from our vendor
- 4 or 5 days later paypal reversed the funds stating that the paypal account had been hijacked/stolen
- call back to the client's phone number resulted in no answer, found out it was a google voice number
- found out the client IP was a VPS machine
- emails to the client started bouncing
Most fraudsters I would guess don't ever get on the phone with you, but with the availability of google voice / skype, etc phone verification simply isn't enough. It's a pain forcing customers to provide ID etc, but losing a few hundred dollars in sales is better than getting scammed with custom setups (which probably would of been used to send masses of SPAM).
Whatever you decide to do, just realize that you can't be too careful. You either risk fraud against yourself or risk turning away legitimate clients.
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08-16-2011, 08:34 PM #14Rockin' the beer gut
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08-18-2011, 12:30 PM #15Corporate Member
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02-22-2012, 05:39 PM #16
For a custom server order I can definitely see how that would be a big problem. For your specific case you've given, it wouldn't have been a serious problem if it was hardware you already owned and typically offered to customers. For that matter, you have the same problem when offering even a legitimate customer a custom server as they could stop paying at any time (even if under contract) and then you're stuck with this albatross. It just makes more sense to only offer servers that you have a ready market for if the customer cancels. If they want something that you can't easily rent to someone else later on, they should be colocating. If you have a regular supply of customers who want a server configured like this, no problem. If you don't, it's a problem regardless of fraud or not.
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01-30-2012, 03:57 PM #17Managed VPS Experts
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It's funny, with 2checkout, we had an order that was processed and it was not marked as fraud.
It was fairly large over $1500. We reviewed it, everything looked good and we processed it.
3 MONTHS later, 2CheckOut shoots us an e-mail saying that the order is fraudulent. I don't know how they can do that after 3 months, but it happens!
But usually 2-3 orders a week are fraud on our side.
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01-31-2012, 02:19 AM #18Web Hosting Guru
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01-31-2012, 02:21 AM #19Not so experienced
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02-22-2012, 06:42 PM #20
With paypal I usually don't find out until about 2 months in. Someone uses the card without a paypal account (unregistered) or creates a new account for this purpose, and then they get two payments through before the victim realizes their card has been stolen and issues a charge back. We're usually about to suspend the customer for nonpayment on their third month when we get the chargeback notice from paypal.
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01-31-2012, 11:40 AM #21Web Hosting Master
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01-31-2012, 11:44 AM #22Managed VPS Experts
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01-31-2012, 11:58 AM #23Web Hosting Master
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There's always something suspicious.
We just had some numbnuts sign up for a server, pay with paypal then complain when we asked for further identification. He listed his address as an Airport. Paypal seems to indicate otherwise.
Every order is suspicious. Especially when a CC can be disputed 6 months later. It pays to get the extra insurance! The only people that have a problem with it are the ones who are going to screw you.█ Jeremy Kinsey (jer@mia.net) - 262-248-6759
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08-16-2011, 06:34 PM #24Randy
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I've seen plenty of fake ID's and CC's submitted (ane they look VERY legitimate). To the point where we no longer accept faxed or otherwise low resolution scans and it's STILL hard to tell at times.
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08-16-2011, 08:30 PM #25Web Hosting Master
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Exactly what I was going to say as we see the same thing.
The one thing we have noticed is they do not like to sign our CC authorization form. You'll hear that they dont have a scanner or a printer(but they happened to have their ID and CC scanned already, the highres ones) and to cancel the order.
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