Chargeback Fraud via online shop

[stressedbob]

Hi everyone,
we have had an online shop via shopify for over a year now and have been very happy with it and the increased turnover it has gained us, also we have only had 1 charge back which is lucky I understand!

We sell photographs and frames etc which we have taken of children in nurseries and parents order via their physical copy proofs.

We had fulfilled (to delivery) several high value orders for a customer which were delivered to a business address - nothing unusual in this.

However 2 weeks after delivery (today) shopify have initiated a charge-back for all the orders as the customer says they are fraudulent, this is impossible unless the customer has stolen card details.

I have spoke to the nursery involved and they have said that all the contact details are false but won't release the real info (understandably).

I have just created a letter for them to be given via the nursery but just wondered what anyone's thoughts are on how to proceed - I realise at some point the police will need notified but pessimistic as to how much they will help!

 

[dotcomdude]

It sounds like the nursery know the real identity of the perpetrators, so I would take this information to the Police and make it clear to them that they can identify a suspect.

You'll still need a lot of luck and a fair wind, as the Police won't want to take it on if they can help it. Speaking from experience as a retired DC!

 

[stressedbob]

Thanks for that, its obviously a bit of a sensitive one and I don't want to go crashing in.
Building up some information first and obviously need to give them the one benefit of the doubt letter before hand!
I can't believe how easy it appears for people to commit these frauds, I can't understand why the money isn't held in escrow until a decision is made!

 

[finleydesign]

Yeh seems extremely odd that if the product is personalised and really only value to someone to why there is a chargeback request

I know it sounds odd, but many many years ago, we had someone do this, and it purely came down to them not realising the name on the credit card slip (it was slightly different to the company name) and instead of thinking about it, they simply applied a chargeback

Seems an odd sort of fraudulent transaction, if it's not your order to buy photos of someone else's child!!!

 

[quikshop]

Unfortunately the Police will not take much of an interest, matters of online fraud are deferred to the banks to sort out.

Back in the day we had numerous fraud attempts, we tried phoning customers of all orders over a certain value and that caught out a few but not all.

In the end we stopped shipping large orders overseas and for the UK we only shipped large orders to the registered address of the card used. It didn't have a material impact on sales, most customers understood the precautions and that got rid of most fraud but even we still had criminals working for the Royal Mail steeling packages and on one occasion an entire bag of orders vanished without trace.

 

[website-designer]

...as the Police won't want to take it on if they can help it. Speaking from experience as a retired DC!

Why is this the case? Isn't this just creating more instances of fraud as people know they're unlikely going to get caught. Thus hurting the economy, especially honest retailers, and then the consumer in the long run?

Got something to do with all those police budget cuts presumably...

 

[quikshop]

Why is this the case?

They don't have the resources. They do have a cyber ops unit who deal with large scale criminal activity, but the banks are responsible for dealing with the vast volumes of fraud through their systems.

And yes the banks are largely passive, its usually their customers who lose money not them so they have little incentive. They're also hamstrung by their legacy IT systems, some of which are still running Cobol and JCL with DB2 on mainframes... pre-PC 1970s tech.

 

[website-designer]

2018...
Police budget £12.3 billion.
Military budget £48 billion.

Something wrong there

 

[1977]

OP, I believe Shopify have just introduced 3D Secure so look into that ASAP and this won’t be something that’s likely to bother you again.

P.s my wife works for the police, don’t bother wasting your time, they will close it down the moment the call is ended

 

[dotcomdude]

Isn't this just creating more instances of fraud as people know they're unlikely to get caught.

Yes, which is why some people decide to make a living out of their criminal ways rather than working for what they want.

Got something to do with all those police budget cuts presumably...

Not necessarily. It's too easy to blame the cuts. You can only safely assume this when you've checked that everyone is gainfully and actively employed in fighting crime - and that the 'Force' isn't spending their money on other things that don't necessarily help. I was surprised to see recently that my old HQ had built a new multi-million pound grand entrance, where there just used to be a field.

 

[Mr D]

Yes, which is why some people decide to make a living out of their criminal ways rather than working for what they want.



Not necessarily. It's too easy to blame the cuts. You can only safely assume this when you've checked that everyone is gainfully and actively employed in fighting crime - and that the 'Force' isn't spending their money on other things that don't necessarily help. I was surprised to see recently that my old HQ had built a new multi-million pound grand entrance, where there just used to be a field.

I often see calls for more police on the streets. Quite what that does to prevent crime I'll never know. Policeman spotted walking down one street then he's not going to get to a house a mile away very quickly.
My brother was a police special for a decade, he did quite a bit more than the minimum hours but of course worked it when he was available, not when the bosses wanted him available. Much to their annoyance. His employer had first call on his time what with it being a hospital.


He knew a thing or two about waste of police time - too many coppers at one place, not enough spread out to respond to others, police used as security guards - hey why not hire security guards for the security guard roles?

 

[Nochexman]

However 2 weeks after delivery (today) shopify have initiated a charge-back for all the orders as the customer says they are fraudulent, this is impossible unless the customer has stolen card details.

Just to be clear - Shopify didn't initiate a chargeback, your customer did. Shopify have simply advised you that the transaction has been chargedback.

If Shopify are telling you that this is a fraudulent transaction using stolen cards then your next step is to identify from Shopify why they allowed the transaction to take place in the first place (unless you are willing to take ownership for all the payments you receive).

It isn't clear from what you have written here whether Shopify made you aware of the security settings associated with your account. If they did not make you aware then that might be a negligence on their part.

 

[LiveNetworks Ltd]

Not used shopify, but do they confirm the delivery address and card holder address match?

As others have said, it's an odd fraud.
You've taken photographs of a child, the parents have been given an order form with a reference specific to that child and an order has been placed via Shopify using the reference from the order form.

Do you have enough information to confirm the name of the child in the picture matches the card holder name? Was the order put on a business card? If so, could it be an admin charging back because the boss put the order on their company card? Could it be a member of staff using the company card without approval?

Either way, I take it you have the name and nursery for the child in question. You could always ask the nursery to ask the parents at pickup time 'if they liked the photographs' Just to get some feedback from the nursery.