Situation 1, 2, 3.
It is like a chain. If the fraud is in your account and you have funds, enom will charge you. If you don't have funds, enom will go to your reseller. If your reseller doesn't have funds, enom will go to your reseller's reseller... and so on.
How to protect yourself?
The answer is simple. You have to know your clients....
This is why I don't like those ads on Related Offers forum, where anyone can pick up an enom username and password... I would never do this, it is too risky.
Modernbill and drams have some kind of agreement with enom and they can setup $7.95 rates, our accounts are just virtual "under 8.95" accounts.
Yes, we have about 500 resellers (hehe...
300 was long time ago), and thank God, we don't have too much fraud orders.