Fraudulent purchase for £3500

[DT22]

Hi,
My employers business recently fulfilled an order for £3500 worth of goods. Unfortunately, it was fraudulent. The "customer" made the order proposing to be the owner of a restaurant. The goods were delivered to the restaurant in question. Soon after, the bank reversed the card transaction as it was deemed to be fraudulent. The courier said they were collected at the back of the restaurant and a signature was taken. The restaurant was called and they claimed they knew nothing about the order or the delivery.

I believe the bank claim that as the address on the card was different to the delivery address, there's nothing they can do.

Anyone have any suggestions or is there little room for recourse at this point?

Many thanks

 

[Blood Lust]

When you run a business you need policies for dealing with new customers:

1. Register on a website like Duedil (free membership). Check out the companies financial history, current cash and if there are large amounts of liability it looks like they will struggle to cover.
2. If you can afford to do so then credit check them.
3. Use the internet to search for reviews from customers and suppliers on the business. A couple of bad reviews out of 50 is good. 40 bad reviews out of 50 then avoid them like the plague.
4. Don't rush to give new customers large amounts of credit. Put them on a 6 months trial first to see if they pay all their smaller bills on time.
5. For new customers only accept card payments and only deliver goods to proper business addresses.
6. Make them sign contracts making them personally liable if the business has limited liability and check that the name on the contract is a registered director for the business.

All this cuts down on bad debt. Needless to say if the restaurant is trying it on there will be a history of it you would have picked up on if you had searched for information about their past.

 

[john1989]

Before despatching high value orders, why not contact the company to confirm their order. Use contact details on their website rather the one they provided when they ordered.

 

[DT22]

The order was for tiles and not a prospective ongoing business relationship. The business has been running for about 30 years. The company primarily operates as a distributor supplying tile shops but they also deal with consumers too. It wasn't an unusual request. Although I agree better measures should be taken to assess for fraud. I think there must be something in place. I've only been working here for a short period of time and none of the current procedures are anything to do with me. Nor was this order. I just wanted to know if anyone had any suggestions for any potential recourse, although I'm not particularly hopeful.

john1989:
The person called to place an order for their restaurant. The delivery was also to the restaurant. It's easy to say now that you could have called the restaurant afterwards directly to check the validity. But I don't suppose it seemed necessary at the time. The company regularly fulfils orders of this size and there wasn't anything particularly unusual.

Thanks

 

[fisicx]

It was unusual in that this was a new customer paying with a dodgy credit card. Restuarants don't buy tiles. Tyler's buy tiles and put them in the wall of the restaurant.

You have been caught up in a scam that is all too common. I know someone who had an order for £50k worth of TVs for Macdonalds and was asked to deliver to an 'overflow warehouse' next to a Macdonalds depot. They lost the lot

 

[john1989]

Nothing unusual about businesses buying materials directly. Many tradesman ask the businesses to do this so that they can remain below the VAT threshold.

@DT22 - My advice was based on the order being high for your business. Obviously if this is a usual order, it's not viable to confirm every order by phone.

 

[DT22]

It was unusual in that this was a new customer paying with a dodgy credit card. Restuarants don't buy tiles. Tyler's buy tiles and put them in the wall of the restaurant.

The customers, be that consumer or commercial, often order the tiles and then find or have a tiler to fit them.

 

[Bill1954]

Don't take telephone orders. Make customers pay through a payment processor that has 3D secure enabled, then, if the billing and delivery addresses are the same, you have some chance of getting your money back.
Edit, just saw that the billing and delivery addresses were different. That is a complete no no without checking the validity of the buyer.

 

[Blood Lust]

It is best to assume a 10% percentage of dodgy dealings or bad debts with your customers and to have the procedures in place to protect your firm's survival from them.

I think you're find with 95% certainty that the restaurant owner knows the person who scammed you and its likely one of his relatives. Maybe a bit of spying is in order to see if you can track the business owner visiting him.

 

[Bill1954]

It is best to assume a 10% percentage of dodgy dealings or bad debts with your customers and to have the procedures in place to protect your firm's survival from them.

I think you're find with 95% certainty that the restaurant owner knows the person who scammed you and its likely one of his relatives. Maybe a bit of spying is in order to see if you can track the business owner visiting him.

Or visit the restaurant in a couple of months to see how your tiles look in situ

 

[Blood Lust]

What is the name of the restaurant by the way? Have you fully checked out its reputation on the internet?

 

[TotalWebSolutions]

Unfortunately, there is very little protection with CNP transactions that result in being fraud. The bank will generally hold the merchant financially viable in these circumstances. All you can do is take extra care to try and prevent it happening again (as per some of the suggestions above). Your payment processing company should be able to offer you some advice on preventative measures.

As suggested above, processing transactions via a secure payment provider (with 3D Secure and billing checks enabled) will offer increased protection against chargebacks and fraud.

 

[DT22]

I think you're find with 95% certainty that the restaurant owner knows the person who scammed you and its likely one of his relatives. Maybe a bit of spying is in order to see if you can track the business owner visiting him.

You can only speculate as to the circumstances. Either the restaurant owner is in on it or they're genuinely oblivious and someone has waited at the back of the restaurant to take the delivery.

 

[DT22]

Unfortunately, there is very little protection with CNP transactions that result in being fraud. The bank will generally hold the merchant financially viable in these circumstances. All you can do is take extra care to try and prevent it happening again (as per some of the suggestions above). Your payment processing company should be able to offer you some advice on preventative measures.

As suggested above, processing transactions via a secure payment provider (with 3D Secure and billing checks enabled) will offer increased protection against chargebacks and fraud.

As I thought to be honest.

 

[serendipitybusiness]

I don't know if this is a possibility for you but I have a credit card cap of £6000, any transactions over this cap need to be paid via DBT. Any transactions over £1500 are also validated through customer contact. Any transactions over a £1000 are also address and contact checked. We do not offer a credit card purchase and pick up service which is where I have had the majority of scam requests arise. This is an unusual case as the scammer is taking a risk by being at the resteraunt and signing for it. I know it is good customer service to give delivery time slots but as your are selling B2B and the business will be open and attended during working hours anyway then it may be worth not feeding the customers this information to help avoid fraudulent action.

Unfortunatly there is not much you can do apart from reporting the fraud and keeping your fingers crossed unless you have insurance to cover fraudulent activity (if such a thing exists).

 

[MBE1]

Before despatching high value orders, why not contact the company to confirm their order. Use contact details on their website rather the one they provided when they ordered.

Personally I think supplying £3500 of goods without any checks to a client demands the above as a minimum level of security check, I would ask for the order to be sent on headed paper from the company email after checking by telephone first.

I tend to always trade cash with order for the first few orders until I am happy with the client and have conducted some credit check on the client. I appreciate the OP was not responsible for the current procedures but this seems to show the company needs to update their security credit checking procedures.

 

[carents]

In my previous job, I was told that 5% fraud was industry standard :| Not sure how true it was, but we were in the process of implementing 3D secure and also blocking all American cards. We had a simple list of black-listed cards that the system won't allow. The way of getting the goods was similar, delivery was on the 10th floor of an apartment block, and the customer would say "coming, downstairs in a min".