FRAUD!! Help Needed

[MMEngServ]

Hey guys,
Not too sure if this is the best Area to post this in, but here goes...

We sell Industrial Electric Motors, and last month we got a new customer, we keep new customers on Pro-Forma payments to start with before they order a fair bit and then we go down the route of Accounts via credit checks etc. but it seemed more like this guy was just making something in his back garden so we kept him on stricly payment first basis.

So on the first occasion he bought something he paid via credit card and all went smoothly, we processed it via our Voice Commerce Virtual Terminal. a Week or so later he bought some more motors (approx £450) again we took payment but this time his credit card failed, so we called him up and he gave us another credit card, he told us the new card was under his name, address etc.. and he collected the goods directly from the manufacturer.

Last week we got an email from Voice Commerce notifying us of a Chargeback, basically saying that the owner of the card from which we took £450 had told his bank he didnt know who had taken the money and so it came back on us as a 'fraudulent transaction'. I called the customer and told him and he was like 'oh that was my partners son's card, dont know why he did that, sorry for the inconvenience, ill get it sorted'. Since then iv heard nothing, all his mobiles are unreachable. I have his address, and a signature from him when he went to the manufacturers to collect the goods.

I have been told by Voice commerce i have approx 7 days to get a written statement from the card holder that it was a transaction he made or else they will give him his money back and i will be left without money for the goods.

Is it really that easy for someone to do that, im absolutely shocked, as sellers are we not protected at all??

Im not sure what to do... Apologies for the long story.. and thanks for all your help in advance.

I basically have an andress, and a name, but im not too sure whats the best way to demand a payment because it seems like the card used was someones elses but they just told me it was their card.

As for Voice Commerce, i managed to put through the full payment and it never flagged up as 'Unauthorised' it just went through as 'Name & Post Code'.. 'not checked'

 

[WirralPrinters]

I would report this to the Police!

It is fraud at the end of the day.

 

[arcon5]

Sellers get an opportunity to defend the chargeback don't they?

I filed a chargeback in December then received paperwork in January where the seller had submitted their evidence/documentation relating to the chargeback.

Should work in a similar way?

 

[cjd]

Welcome to the world of credit card fraud - the first rule of which is that if the customer wants to pick up the goods, use chip and pin; card holder not presnent transactions all favour the fraudster.

The second rule is to insist on verified by visa if you do do it online.

Forget the police, they're not remotely interested and you'll get little to no help from the card company. You can try to argue your case but the chances are slim if the card used was stolen and not much better if the guy simply denies he purchased the goods.

 

[SpeedyExpressCouriers]

I'll second cjd, police will not be interested but you should be able to dispute it.

 

[paultnl]

It does not if matter if the police are "interested" there is evidence of a crime and it is what we all pay taxes for.

 

[strikingedge]

I recall the law changed to help sellers out.

When I first started out doing mail order, if we got fraudulent transactions and chargebacks, regardless of whether it was a stolen card or the card was not stolen but the customer didn't fancy paying for the received goods, when I went to the police, I was told no crime had been committed.

Their reasoning was that the cardholder was compensated and the bank had got their money back. The value of the stock delivered and lost just wasn't a crime in their eyes!

When the law did change, I contacted the police next time it happened. First they denied any knowledge of the law, then they came back to me and said it had to be over £350 for them to investigate.

I strongly suspect that policy changes from force to force - so it depends where your guys lives on whether they are prepared to investigate.

But - if the loss if £450 they might be prepared to do something. However, if it wasn't the guy's card, I doubt you'll get much interest.

So you may be better off with a civil action - might even be worth filing that before the chargeback goes through so you have a bit of leverage in getting them to withdraw.

 

[obscure]

Based on what you say fighting the charge back will be a waste of time. The person ordering committed fraud and the card owner didn't order the goods (or at least will almost certainly swear blind that they didn't) so there is no reason for the card company to honour the payment.

You best options are the police or civil action.

 

[Splashy]

It does not if matter if the police are "interested" there is evidence of a crime and it is what we all pay taxes for.

It's not quite as simple as that. The law changed in April 2007 to make the finance companies responsible for investigating fraud themselves in an effort for them to get their house in order. The reason? People were reporting credit card fraud over the internet left right and centre but when investigated by the Police they would tell them they couldn't supply the data they wanted due to their rules, therefore, online credit card fraud was placed into their remit to investigate.
The Police will still investigate clear cases of fraud but a lot depends on who evaluates the crime and the actual crime/amounts etc. It is not easy to investigate cardholder not present and product drop - collect from manufacturer transactions!

 

[steve23]

Hi,

I would allow a resonable amount of time to pass for the customer to get back to you - maybe another week - and then action this via a civil claim.

I don't think the credit card company will help as to them it would appear to be pretty much an open and shut case of card holder did not authorise this, and I dont think there is enough 'criminal element' to get a fraud offence for the police to deal with.

I've almost done the same thing as this guy - in a way. I remember buying something of the internet, and using my mum's card to do so - with her knowledge and permission. However, she forgot all about it, and not being up with the internet, when this 'strange' internet charge arrived on her statement, she rang up to challenge it.

All ended well in the end when I heard about it and reminded her of the use etc.

But if I had not done so, where would that have left the vendor ?

So overall, I go with a civil claim, though if by any chance you can get this resolved by talking to the customer (though I know you have tried and now he is not contactable) all the better for you.

All the best

Steve

 

[Swisaw]

A crime has been committed. He used some one else's credit card without the the authority of card holder. This is a theft. In this case police will immediately takes action to arrest the fraudster.

 

[vvaannmmaann]

Swisaw - What planet are you on?

 

[Swisaw]

Swisaw - What planet are you on?

Go out to check your van. You got a ticket because the wheels of van were on the ground.

 

[steve23]

Swisaw - if you had put a smiley at the end of your first post it would have been ok, but I think you are serious (?)

That said, you wont be the only one,

Can I suggest a quick google of the fraud act - and the theft act.

On first glance, you might think the fraud act is all very clear, and there is no need to dig into the theft act, but I would advise that on two accounts.

First - you mention 'its theft' so you should at least take a look at sec 1 of the relevant act

and second - you'll see the word 'dishonestly' appears in the fraud act. This is a fundamental concept within the general area of theft, and an understanding and further reading of the theft act might help you to see where the law is coming from on this.

Now, I'm not saying this was not an offence - but as in many such postings, going on the information we have, you cannot say that it is an offence.

The Police have a duty to investigate offences but are not bound by law that says they must take action. Chief constables are empowered to make decisions as to what their forces will and wont action - which is correct and saves the tax payer a vast amount of money and enables the thin police resources they have to be used in the most effective way.

So that all adds up to a situation where the police wont neccessarily rush round and arrest the guy !

Like I've said, unless there is far more evidence of a 'sinister nature' available, id go down the civil claim route.

All the best

Steve

 

[Swisaw]

Swisaw - if you had put a smiley at the end of your first post it would have been ok, but I think you are serious (?)

That said, you wont be the only one,

Can I suggest a quick google of the fraud act - and the theft act.

On first glance, you might think the fraud act is all very clear, and there is no need to dig into the theft act, but I would advise that on two accounts.

First - you mention 'its theft' so you should at least take a look at sec 1 of the relevant act

and second - you'll see the word 'dishonestly' appears in the fraud act. This is a fundamental concept within the general area of theft, and an understanding and further reading of the theft act might help you to see where the law is coming from on this.

Now, I'm not saying this was not an offence - but as in many such postings, going on the information we have, you cannot say that it is an offence.

The Police have a duty to investigate offences but are not bound by law that says they must take action. Chief constables are empowered to make decisions as to what their forces will and wont action - which is correct and saves the tax payer a vast amount of money and enables the thin police resources they have to be used in the most effective way.

So that all adds up to a situation where the police wont neccessarily rush round and arrest the guy !

Like I've said, unless there is far more evidence of a 'sinister nature' available, id go down the civil claim route.

All the best

Steve

I am sure you know better than me in this case. But I am also sure if this case is reported to the police, police will immediately take action by contacting the fraudister to report to the police station otherwise a warrant will be issued for his arrest. Off course police has to prioritise resources.

 

[cjd]

I am sure you know better than me in this case. But I am sure if this case is reported to the police, police will immediately take action by contacting the fraudister to report to the police station otherwise a warrant will be issued for his arrest.

Nope, they won't, sorry. They'll tell our guy that he must sort it out with his bank. Sad but true.

If our fraudster walked into Tesco and walked out with TV without paying, plod would arrest, charge and prosecute. If the same criminal blagged the TV by online credit card fraud they would just shrug.

 

[PayVector]

Police will not do anything. The problem I have always maintained is that they see this single incident as a single incident. Most fraudsters will hit many many merchants.

So merchant 1 is in London and Merchant 2 is in Leeds. Different police forces and no central tracking or coordination for police to pick up that this single incident might be part of a very big fraud ring.

What the police dont get is these guys dont do this type of thing once.

 

[PayVector]

I just thought of someting. OP mentioned the guy picked the goods up from the manufacturer. Why not trying to phone them to see ifthey have CCTV footage of this guy.

 

[MMEngServ]

Nope, they won't, sorry. They'll tell our guy that he must sort it out with his bank. Sad but true.

If our fraudster walked into Tesco and walked out with TV without paying, plod would arrest, charge and prosecute. If the same criminal blagged the TV by online credit card fraud they would just shrug.

Just spoke to the Police and they said exactly what CJD said that they would do... Nothing.. they said go through the Banks.

Think what we are going to do is firstly send him a letter to the address where the goods went to, as we also have a signature of acceptance of the goods, with a different initial but the same surname, so im assuming it may be his partner/family member.

If that gets me nothing then civil action it is.

Just abit dissapointed in the police & the system to protect us against such fraud.

Thanks for all the comments and advise, I really appreciate it. Will keep you updated of progress..

 

[Lease4Less]

When you contacted the customer and he gave you the 2nd card details, please tell me that you confirmed with him that is was HIS card and that you confirmed the address that the card is registered at?

If you didn't do this then you do not have a leg to stand on.

If you did, why did the terminal that processed the card not pick up the address being different - I assume that the cusotmer doesn't live with his partners best friends cousins son?

Sorry to sound harsh but with the amount of fraud that goes on (and yes this is definately fraud), I don't think you have done yourself any favours.

You need to refund the money, and either sue the customer in the small claims court (if you can trace him - you should have his address from the credit card payment that was authorised), or simply write the money off and learn from it.

 

[MMEngServ]

When you contacted the customer and he gave you the 2nd card details, please tell me that you confirmed with him that is was HIS card and that you confirmed the address that the card is registered at?

If you didn't do this then you do not have a leg to stand on.

If you did, why did the terminal that processed the card not pick up the address being different - I assume that the cusotmer doesn't live with his partners best friends cousins son?

Sorry to sound harsh but with the amount of fraud that goes on (and yes this is definately fraud), I don't think you have done yourself any favours.

You need to refund the money, and either sue the customer in the small claims court (if you can trace him - you should have his address from the credit card payment that was authorised), or simply write the money off and learn from it.

I dont think we did anything wrong at all, we followed full procedures, he did confirm it was HIS address, HIS name etc, and we went through the whole security details, address, post code etc. I said the exact thing to Voice Commerce (our terminal people) and asked them why it went through and they said with Visa Debit they do not check it, otherwise when we put credit cards through it clearly states 'Address, Security Code, Post Code Authorised' and if it doesnt match it fails straight away. For some reason these cards went through and they were marked as 'Unchecked' but it still went through.

The system is just a massive flop to be honest. From Visa, Banks, Police..

 

[cjd]

The system is just a massive flop to be honest. From Visa, Banks, Police..

The reason it's like that is because the retailer takes the damage. The customer, banks, fraudsters, police are all shielded; nothing will change - you have to look after yourself.

So make this a fairly cheap learning experience and give yourself some protection. Use only Verified by Visa online transactions and if anyone is picking goods up make them pay at pick-up because you then have the protection of chip and pin plus the buyer loses his rights under the Distance Selling Regulations.

Any new customer buying big ticket items could pay by bank transfer.

 

[Lease4Less]

I dont think we did anything wrong at all, we followed full procedures, he did confirm it was HIS address, HIS name etc, and we went through the whole security details, address, post code etc. I said the exact thing to Voice Commerce (our terminal people) and asked them why it went through and they said with Visa Debit they do not check it, otherwise when we put credit cards through it clearly states 'Address, Security Code, Post Code Authorised' and if it doesnt match it fails straight away. For some reason these cards went through and they were marked as 'Unchecked' but it still went through.

The system is just a massive flop to be honest. From Visa, Banks, Police..

You are saying that Voice Commerce do not check the security of Visa Debit Cards?

Certain merchant machines will process the funds if you do not complete the post code information and it will show up as data not checked, or if you put it through incorrectly it will say data not matched.

If you did follow the correct procedure and your card terminal are telling you that they did not check the security information I would be asking them to cover your costs.

 

[MMEngServ]

You are saying that Voice Commerce do not check the security of Visa Debit Cards?

Certain merchant machines will process the funds if you do not complete the post code information and it will show up as data not checked, or if you put it through incorrectly it will say data not matched.

If you did follow the correct procedure and your card terminal are telling you that they did not check the security information I would be asking them to cover your costs.

I guess they must not check security on visa debit. It 'Matched' the Security Code but 'Unchecked' the Address/Name Details.

I think I will be asking them to explain exactly why even after putting in all the wrong address,post code, name details that it went through unchecked.

It is a learning curve, I am new in business but we have been making sure we follow full procedure when taking card payments as we take a fair bit on a daily basis.

 

[Lease4Less]

I guess they must not check security on visa debit. It 'Matched' the Security Code but 'Unchecked' the Address/Name Details.

I think I will be asking them to explain exactly why even after putting in all the wrong address,post code, name details that it went through unchecked.

It is a learning curve, I am new in business but we have been making sure we follow full procedure when taking card payments as we take a fair bit on a daily basis.

It is really frustrating that even when you do everything right you end up getting stung.

Good luck with getting the money back, but seriously consider getting a merchant account that offers you better protection.

 

[Wiggy]

IMHO, the chargeback will stand. You have lost that money.

AVS checks for 'cardholder not present' transactions will allow you to fight a chargeback in most cases where you can prove delivery to an address that was verified by the system. If the address is not confirmed or you deliver elsewhere [manufacturer's gate] you are liable for fraud losses.
The AVS check does not in any way affect authorisation, it just gives you information. You can experiment with your system and your own card, enter a wrong postcode, street number and CVV number, it will still authorise.
What it can do is confirm the cardholder's address or prove it wrong. If it says "not checked", it almost always means it is a foreign card as all UK banks (and many U.S. and W.European) banks will provide AVS feeds with their auths.
The Police won't even come out if this guy tries again and you give them the time and place of the collection, truth is this sort of crime is not interesting to them. As for a civil case. . . You can't sue the genuine cardholder which is likely the name the crook gave you, the mobiles will be PAYG who can you go after in court?
If you can get CCTV footage, you might get some publicity on a TV crimestoppers type show and help arm others against this crook or type of crime. . .

You won't be caught like this again. . .