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Fraud customer ALERT


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Just got off the phone with him.. He admits ordering servers from us and "a few" others. His explanation was he didn't know his parents CC was on the paypal account and when it was found they started disputing the charges.. A total of 7 through us alone equaling almost $400.


I advised him of the potential legal issues he faces and encouraged him to speak to the parents as we have more then enough proof to overturn the charges.


Good luck!

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Had this guy a cpl months back, had the server for 2 months then second payment came and they issued 2 chargebacks. I had to phone paypal to rectify the issue, and I did get my funds returned after 3 phonecalls.


I find it amazing sometimes that some of these people's paypal accounts aren't removed when consistent issues arise from them.

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Guys, as ive not been hit by anything as of yet "touch wood" What is it to look out for? apart from the name etc? How are you getting hit as such. Are all your systems automatic so that as soon as something is payed for it goes active? If a situation arises can you not simply switch off there services? and that be the end of it? im just not clued up as to how the money side of things can hurt the business as all they are doing is taking away the funds that customer paid?! am i correct?

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Ok thank you for the infomation.


Is there any payment companys like paypal that work better against fraud like this? Even with a monthly cost etc?


Even tho we are only going to be using paypal short term before we bring our bank payment system up online i would like to secure against this.


Thinking about it i think i do have a fraudulant customer on the books, as they seems to pick the largest vent service i offer and ive noticed it not being used and the address was spanish. So i will go thro the process now of speaking to paypal before he gets the chance to try and conn me.

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There are a few fraud prevention services out there, however if the person pays via credit card and then does a chargeback then you simply eat it. Just save the chargebacks and write them off on your taxes at the end of the year.


You will never win a chargeback unless you have a signed sales slip.

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If your business is distinguished as a "card not present" establishment those rules don't apply. It's much easier winning a dispute if you have a copy of the card in hand but not required for a reversal.


To win a dispute you should at minimum provide:


1. Proof of positive AVS/CVV

2. Positive GeoIP information (IE: Maxmind, FraudGuard reports)

3. Copy of Original signup receipt

4. Copy of order/setup email

5. Any correspondence with client (support requests, email etc.)


Keep in mind there are two different kinds of fraud orders. Most of the ones we see are like the one described in this topic where the client signs up using his CC and later on decides for whatever reason to issue a charge back.. In this case the reason given was "Don't recognize the charge"


This type isn't difficult to win since we can pretty easily demonstrate to the CC company the card holder is the same person who placed the order by submitting the documents outlined above which show beyond a doubt the order was legit.


Hope this helps!

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The most frustrating things I found was when I protested a 6BP web hosting charge with Paypal. I knew the guy who purchased (not personally obviously) but through ALOT of support time.

On top of loosing the 6GBP they charged me 7GBP. So for that transaction I lost 7GBP plus his intiial transaction.

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Ive became almost bankrupt and have spent almost a dozen thousand out of my own pocket for my clothing business because of stolen credit cards/people charge backing.


The difference with a server is, you only lose bandwidth. When I was selling clothes, I would not only lose the money from the chargeback, but also lose the money spent on sending and buying the clothes in the first place.


Since I worked with drop shipping from China, I never physically touched the clothes.


How it would work;


I put hoodie on website

Someone orders hoodie for $60

I send my supplier $40, he sends the hoodie to address provided (only did addresses that match credit card address)

customer does charge back 2-3 months later

they get their $60 back, I lose the $40 sent to China, and now I get a $20 charge back fee from Merchant Services (really shitty credit card processing company, I do not recommend them)


This is one of the main reasons I had to stop selling servers, because the clothing business was just dominating my money.


Ive provided signed tracking numbers to the company, but they dont care. All the chargebacks come back as "Did not approve of transaction" yeah but I bet your son approves of the clothes he is wearing for free now huh?

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We try to compare ip's and address's when we can. the impossible is when 14yr old johnny uses moms CC, you will never win on that type of chargback. At one point we faxed signed docs with dedi sales so we have the card and sig. we still LOST the chargeback. "mommy" said johnny forged her sig, so you can't win.


I consider chargebacks a price of doing business, just like advertising. I know the buck a slot idiots dont factor that stuff in for sure...:)

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