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Cyprus
Posts: 97
Joined: 10/21/2002
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Going out of business because of Fraud - 7/19/2003 15:43:13
Well... I have a business that sells computer components, in the past week we' ve found out that 2 seperate people had used a stolen credit card to purchase products from us even though all their information checked out. So that' s puts our chargeback level over the limit and they' re going to cancel our Merchant Account.
The worst thing about all this is that I have every little bit of information about the 2 people who commited the crime but the authorities won' t do a thing about it. I feel like the guy from " Falling Down" . I really want to go to these peoples houses and do unspeakable things, HOW DARE THEY RIP ME OFF! So this is a warning to everybody, be careful about selling things online.
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Doug G
Posts: 1189
Joined: 12/29/2001
From: SoCal
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RE: Going out of business because of Fraud - 7/19/2003 18:29:06
Sorry to hear of your problems.
If you' re in the US, document everything and send a copy to your state' s Attorney General including a description of the lack of interest from your local enforcement people. If the state has any jurisdiction you should get some kind of response, in any case you' ll have a good set of documentation in case something surfaces later ;)
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espinja
Posts: 3
Joined: 7/19/2003
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RE: Going out of business because of Fraud - 7/20/2003 8:24:17
Most likely, your bank won' t help you. Your merchant/bank only care about themselves.
But...
Your bank' s competitors will be very happy to assist you... They will LOVE hearing about their competition' s screwups...
Or...
Why not place an out-of-state order with the stolen card/info?
Sounds silly, I know... But bear with me...
If you place an order with another business, using the same card and verification/billing info, then that company could report them, without shipping any products.
You know, if you place it with an out-of-state business (meaning, different from your home state), then it will become a federal offense. The FBI doesn' t waste any time like local law enforcement usually does with this kind of crime. They have special divisions that exist to ONLY DEAL WITH this type of scum.
This way, another business would be helping you speed up a very slow process. Of course, they shouldn' t actually SHIP the products ordered...
And, also, I' m not suggesting any of US should do this... After all, we' re legitimate businesses...
:)
I' m just joking around, Cyprus... And hoping a little light humor might make a bad situation a little easier for you to endure.
Keep your chin up, learn what you can from this experience, and then put it behind you... I know how angry you are (been there), and how frustrating all this is. But don' t let drastic times trigger drastic measures. Keep looking for a way to survive this, instead of going out of business.
Or...
Find another business in town, just like yours, and explain what' s happened. Then, ask if you can borrow the same equipment you were tricked into selling. If they let you borrow it, then drop it into your inventory, call your merchant, and tell them to cancel everything related to the order, since the " bad guys" decided to bring the stuff back... They should free up your account, at that point, while still conducting their, uh, " investigation..."
Make sure you take the equipment back to the other business, of course. And, offer to do the same if it ever happens to them. You might even find a potential partner, who you can cross-pollenate sales with. Complementary skills sets, etc...
:)
Usually, the worst experiences in life (like this), are actually what make people stronger/smarter/better than they were before those experiences...
Good luck..!
Joe...
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Mojo
Posts: 2431
From: Chicago
Status: offline
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RE: Going out of business because of Fraud - 7/20/2003 23:26:11
quote:
Some responsibilty should be taken by the providers and those accepting the information as true.
They don' t care at all about merchants. For this reason, I am very excited about the class action lawsuit that Visa/MasterCard are facing.
Cyprus, I am sorry about your situation, but 2 chargebacks hardly seems enough to cause you to loose your account.... unless they were for huge amounts that caused you to go way over the limit.
You should looking into some of the other card systems available. You will probably not be able to get another merchant account in the near future, but you can use some of the go betweens.
I have 2 merchant accounts and neither one will let me sell computer components... too much fraud.
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mbmunday
Posts: 162
Joined: 8/8/2002
From: North Richland Hills, Texas
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RE: Going out of business because of Fraud - 7/21/2003 6:22:17
Being that law enforcement is my full time profession, let me elaborate on why the " authorities won' t do anything about it." Now, I can' t speak 100% for your situation when you say that you have " every little bit of information about the 2 people who committed the crime."
However, in most cases like this, it' s not that simple. You have to be able to pin point a specific person who was responsible for the order. For instance, with check forgeries, the cashier who accepts a forged check would have to be able to identify the person that presented the check, or you have to excellent surveillance video in lieu of this. With internet orders that are sent to a home, this makes it MUCH more difficult. The home is most likely occupied by more than one person. Hence your first problem. How can you prove which person did it? You can' t be certain that one person didn' t placed the order in the other' s name. (e.g. - I actually committed the fraud, but placed the order in my wife' s name when my wife knew nothing about it.)
I' ve investigated cases like this where the victim thought they had the person tracked down, when they actually weren' t even close. Identity theft and credit card abuse cases have sky rocketed the past few years. They are VERY hard to " do anything about" because it is not discovered that a crime has been committed until several days and sometimes, months later.
In my 6 years, I' ve only worked 2 cases where an arrest was made involving credit card abuse and they were only because the culprits were caught red-handed. The most recent was trying to buy a $2100.00 big screen tv, just 3 hours after stealing the credit card.
Again, you may have the actual persons tracked down and maybe your local law enforcement isn' t just willing to investigate them, but, like I mentioned earlier, the victim' s I' ve dealt with (easily 300 plus cases in 6 years) were never able to track down the person responsible. Credit card abuse and ID theft cases rarely have leads that result in an arrest being made. (Please don' t take offense, I' m ONLY speaking from my experience.)
So, in most cases, it' s not that the authorities won' t do anything about it, it' s most likely that they can' t do anything about it because nothing can be proven (beyond a reasonable doubt). Television has done a terrific job making most of what you see on TV concerning law enforcement a myth of what police can or cannot do.
Anyway, I' m sorry to hear about your troubles as well. I received my first bad check not too long ago.
In my opinion, credit card companies rank right next to insurance companies - the DEVIL 
They truly don' t care about their clients, laughing at them behind their backs while making money hand over fist. LOL
Good luck,
MB
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cooper
Posts: 773
From: Woburn MA USA
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RE: Going out of business because of Fraud - 7/21/2003 14:02:45
While it won' t get you a merchant account, I am assuming they have your goods.
Sign them up for EVERY free offer you can find, from dog food to adult diapers to free subscriptions of SI.
Who knows, maybe the jack@ss will suffer a horrible death when the mountain of junk mail shifts and crashed through his front door.
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AlanSupply
Posts: 27
Joined: 7/10/2003
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RE: Going out of business because of Fraud - 7/21/2003 20:58:47
if the authorities need proof that that person stole it why not just tell the person that the factory made a defect in the manufacturing and out of your gratitude you' re trading them a better componet for the one that they bought. Get an officer or someone to verify that that componet was the one exchanged.
EDIT: Nevermind, this scheme would take too much effort, and you would never get the authorities to spend their time on it. You' ve also probably already notified the person about the fraud anyway.
< Message edited by AlanSupply -- 7/21/2003 9:00:57 PM >
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Cyprus
Posts: 97
Joined: 10/21/2002
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RE: Going out of business because of Fraud - 7/22/2003 5:36:22
mbmunday, I understand what you' re saying. But for the first fraud encounter, the order was taken over the phone by an older male. There are 2 occupants of the home that I can tell. But that' s not really the point, do the police and FBI care about my situation even? Do they say, " ok we need this and this information and we might be able to help" , NO. They say, " there is nothing we can do" right off the bat.
Just to let you know of some bad experience with the cops. One time I worked at a computer store where somebody had wrote a bad check. One of the people who worked there was suspicious of the guy, so he got the perps license plate number. After finding out it was a bad check, it took at least 10 calls to get the police to take the guy to jail. They had repeatedly lost the license plate number, and had to be basically harassed so they would take this guy to jail.
Another time a friend of mine was assaulted by her ex-boyfriend. The cops went to her house, and talked her OUT of pressing charges!!! This was by far the most cruel of my dealings with the cops.
I have many other stories of having to force cops into doing their job. The problem is our whole law enforcement system, and even more so with internet fraud since it' s still fairly new and there doesn' t seem to be a good system in how to handle it. It' s just really frustrating. But anyway, thanks for the replies guys.
< Message edited by Cyprus -- 7/22/2003 5:45:35 AM >
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mbmunday
Posts: 162
Joined: 8/8/2002
From: North Richland Hills, Texas
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RE: Going out of business because of Fraud - 7/22/2003 5:51:16
I understand. Like I said, each situation is different and everyone has a horror story, no matter what it involves. The FBI has slacked off of these types of cases to concentrate mostly on counter-terrorism. The Secret Service will only get involved in cases where an extremely large amount of money was lost (like 20 plus thousand).
I' m in Texas, so the laws, procedures, etc. differ from state to state. I can believe your story concerning your friend' s ex-boyfriend is plausible. Our legislature has stepped in and classified dating, even ex' s, as family violence. Therefore, regardless of whether or not the victim wants to file charges, the police are required to complete a report and the charges are filed on the State' s behalf.
A lot of agencies are just under-staffed. For instance, Dallas Police Department has 1, yes 1, detective that handles ID theft, credit card fraud, etc. He has 20,000 plus cases. Needless to say, he doesn' t make many of his victims happy in their pursuit of justice.
I' m on both sides, I do law enforcement full time and run a business part time. I' ve been on both ends.
Anyway, good luck and I hope it all works out for you.
MB
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Reflect
Posts: 4769
From: USA
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RE: Going out of business because of Fraud - 7/23/2003 7:57:37
quote:
I remembered reading about this guy who tracked down a fraud person himself -
ROFLMAO!!!!!
Right on!!!
I can see it now, I just found a new business model. Have a collections site. Contract with bounty hunter style people in all major cities. Give them a %.
LOL.
Brian
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mickinspain
Posts: 29
Joined: 4/3/2003
From: La Nucia - Spain
Status: offline
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RE: Going out of business because of Fraud - 7/23/2003 10:26:55
This is a global problem. I now live in Spain, but we maintain an address in the UK, last October a replacement card for my wife was sent to our UK address, despite a change of address being registered by the Credit card Co. Someone intercepted the card, spent £2500 on it before her bank refused the direct payment and they closed the card down. We have a good idea who it is, but the UK Police won' t act because we have lost nothing only the CC company has lost, or perhaps Tesco, but we can' t report it because we haven' t lost it.
Here in Spain your card must be collected from the Bank, they then activate it while you wait, at the ATM, you cannot use it in a shop without showing alternative ID. It doesn' t stop the crime just slows it a bit. What we all actually need to do is cancel our cards until they do something, they would soon take notice if 20 million people all closed their accounts overnight.
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mikep1967
Posts: 5
Joined: 2/27/2002
From: Colorado Springs Colorado USA
Status: offline
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RE: Going out of business because of Fraud - 7/23/2003 10:59:43
Dear Cyprus,
I too had a situation similar to yours and was able to get the charges reversed with the help of a lawyer. The first case of fraud I encountered was a large purchase from someone overseas using a stolen card. After some investigating, it turned out that the address verification service (AVS) on my terminal had been turned off. Therefore, there was no way that I could determine if the card was stolen. I had my lawyer write a letter for me to my merchant service provider, and I was given a refund for the amount of the charge. Several weeks later, I was notified of another illegal purchase. Since the transaction took place during the time when my AVS was off, I used the same letter from my lawyer to resolve this issue and get my money back.
The first thing you need to do is prove that this was not your fault. Does your terminal have a printer? If so, the receipt should show that there were no mismatches when checking the user' s address. Call your merchant provider and speak with someone in terminal support. They should be able to tell you if your AVS was active at the time the transactions took place. Also, gather all of your invoices and shipping documents. If you shipped via UPS or FedEx, call them and ask for their shipping records. They keep signatures on file of the signing party for a short period of time. Once you get your ducks in a row, hire a lawyer to write a letter for you. It will cost you some money, but it will be worth it if these charges were sustantial. It will also clear you of any wrongdoing.
So here' s what I' ve learned from my experience that I will pass on to anyone with a merchant account:
1. DO NOT accept orders from overseas!
2. If something doesn' t seem right about an order that was placed, question the person placing the order by asking for the name of the issuing bank and the phone number. Call the bank to verify. I recently received two orders for ink catridges through my web site. They were placed 45 minutes apart, one to ship to FL and one to CA. The person who placed the order filled out the forms in the same manner, put in different names and addresses, but used the same e-mail address, and the same area code on the phone numbers. The other odd thing about the orders is that they both were for 3 cartridges of the same color. When I e-mailed her requesting verification, I never got a response.
3. Request that your merchant account be setup to accept the card ID. It' s a 3-digit number on the back of the card in the signature strip. This is another form of security that verifies the user' s information.
4. Always use a secure server like mals-e to collect credit card information. Mals-e has security features as well.
5. Save every piece of documentation you have for each order placed.
6. Be suspicious of very large orders where the customer does not seem to be concerned about price or shipping costs.
I know it really sucks to have to go through a situation like this, but I hope the information I' ve passed on will help you now and in the future.
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nickhurd
Posts: 36
Joined: 1/26/2002
From:
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RE: Going out of business because of Fraud - 7/23/2003 11:01:03
Cyprus -
It sounds like there' s not a lot you can do about the prior merchant account.
It' s very easy, other than the expense, to get a new merchant account. Just don' t mention that you had a prior account. By the way, if any of your sales are made on your premises, even once in a great while, tell them you have card present / swiped transactions. This will lower your rate and from an underwriting point of view is much more desireable.
One of my clients has a number merchant accounts and none of them are aware that he has other accounts. It' s never come up as an issue.
Nick Hurd
eCOMpal
Selling Online Simplified
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Mojo
Posts: 2431
From: Chicago
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RE: Going out of business because of Fraud - 7/23/2003 11:13:51
quote:
Just don' t mention that you had a prior account.
Merchant accounts have their own version of a credit report. As long as you give them your correct information, they can find out if you had a merchant account that went bad.
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Long Island Lune
Posts: 2340
Joined: 6/8/2002
From: New York
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RE: Going out of business because of Fraud - 7/23/2003 12:11:42
This post made me feel like I' ve been hidden in a closet the whole time. I couldn' t beleive it. We do heavy ecommerce and have never had this problem. Two illegal transactions and they can cancel your account? That seems like an awful narrow margin for any company to regulate itself by.
Cyprus,
WHO was the company that wants to cancel you??? You should make this company public to the forum so future people can avoid using them.
HOLY MOLY...
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AlanSupply
Posts: 27
Joined: 7/10/2003
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RE: Going out of business because of Fraud - 7/23/2003 17:16:26
my merchant charges an extra %1.5 if i don' t have the cvv id, i had to buy a $30 add in to storefront.
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braveheart
Posts: 1
Joined: 7/23/2003
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RE: Going out of business because of Fraud - 7/23/2003 17:35:39
Wow! what a rip. Seems like companies like PayPal might be an alternative. The only draw back is you customer has to create a PayPal account and they check em out! I have seen a lot of new tools asp and php and more that allows you to create a PayPal shopping cart.
Anyway good luck. I think this is a problem we will all have to face at one time or another.
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