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Providers: How often do you scamed or get succesfully defrauded?
skirtTight
Member
Like, how often do you get people paying with stolen cards/paypals and actually succeeding at it for a while?
Just talk about the times you noticed you were a victim of fraud
Just curious.
Comments
Fix title.
Im guessing it is quiet often, and probably what many of them will use as a test on charges since they are around ~$5 and thus very cheap.
it is not even stolen credit cards. The worst is the people that are real and do chargebacks without submitting a ticket for thier issue. Get you nailed with a fee. Those are the worst.
Buys small service (under $5) with stolen card
Service is valid for 3-5 days (see next point below)
Asks for refund, citing money back guarantee
Just used your company to test if a stolen card is valid or not
Do they actually get away with it?
Any of you got any tips on how to prevent this, and what to do in case it happened to you?
we just had 2 of them. They passed all fraud prevention measures. Yes they do. With paypal you have the same issue also, the credit card company only cares about thier members not the business they screw.
In order to not get too specific, I like to work with "off the top of my head" numbers. If I had to place a bet, I'd say somewhere around 1 out of 30 fraud attempts manages to get something through. If we didn't take the measures that we do to detect potential fraud beforehand, I feel confident in saying that we'd already be out of business from the impact.
What I've learned so far is that if it seems strange and out of place, don't feel bad about questioning it. I'd rather accidentally turn someone away who is extremely concerned about being 100% anonymous to me than open the flood gates to blacklisted IPs and frequent downtime for clients due to abuse. It's an unfortunate balance where you simply cannot have perfection on either end of the scale.
Knock on wood. So far we've had zero chargebacks for the just over two years of offering VPS services.
But we phone verify all orders and reject quite a lot orders too.
Haven't lost any dispute once.
@RobertClarke Was it someone who filed a credit card charge back. Paypal pretty much throws thier hands up, and now to find out so does stripe.
Stripe and pp are way better than 2co.
If you want to win 100% chargeback, all you need is scanned copy of ID and CC.
But we phone verify all orders and reject quite a lot orders too.
That gives me an idea...
Make like an automated service to do this, give the person a call, explain the terms of service, ask if they agree to them, then give them a code they have to enter on the site to validate their order.
@Rallias MaxMind does this for you, but only for the code part. It doesn't "read their rights" ;-)
3 in 2 years that have resulted in significant loss.
Any tips/ideas?
It is pretty rare, but it happens to everyone.
So 1/30 gets through...what's the ratio of fraudulent:legit to start with?
Let's just say that if I had half as many legit orders every week as I do clear fraudulent ones, we'd be growing a lot faster
And most of them are unquestionably fraudulent orders. There's some patterns that they follow so clearly, specifically, and consistently that it's almost hilarious.
And you feel bad for the 1 that you look at and go looks like fraud, smells like fraud, must be fraud, which wasn't
funnily enough I was never asked by any provider to provide additional info or prove that I am who I am despite the fact that I'm ordering from a different country that I'm giving address and always pay with my other half paypal account (i.e. names don't match)....
Well, with the explaining the ToS, that part and the customers subsequent acceptance can be recorded, signaling evidence to paypal that this person agreed to our terms of service, and entering the code on the website signals that they are who they say they are.
@miTgiB Yeah it always pains me when they respond later with a polite attitude. Although not often the case, it does happen.
This is a hard one here too.
I feel we are rejecting some legit orders and this I dont like. We have manual phone verification for orders that look bad. At times get reports that an order is suspicious after has passed checks.
Chargebacks are not often, about 1, maybe 2 a month, the police calls are much more annoying, Italian police expects us to have every log of every connection of every IP for the last 6-12 months. Now I see why there are so few providers in Italy.
There are, of course, the clearly fraudulent ones, with names like df df or John Smith from Vietnam. Those make the bulk of rejected ones.
We also have no money back guarantee, we reply inquiries that is done only if the VPS/node had some problem.
While Uncle thinks the fraud rate is high, I expected higher due to generous traffic we offer, lately even spammers are few and far between or dont use the IPs here to send the spam, only to host DNSs/CC harvesters that we find out about via other means.
As for tips, well, one strike and you are out policy+manual verification for spam/outgoing DDoS will keep the false positives to a very low level while spreading the word that it is probably not worth it to do such things from your network.
Since frauds are usually done by spammers/kids/fake shops usually, this reduces the chargebacks too, it is still sad Paypal doesnt look at the arguments, it just refunds the abuser since it didnt pay with it's card.