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Thread: What to look for with online fraud

  1. #1
    Member RonG is on a distinguished road
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    What to look for with online fraud

    Ive noticed a few things about fraudulent orders and chargebacks. Here are a few things ive noticed when orders might be looked at as fraud but turn out to be legit.

    If the billing and shipping address is the same- Most of the time a fraud order is going to a different location than the billing address.

    If the amount is low, like $50 or less- If you were using a stolen card would you buy a sweater or a iPad? Most times the person is looking to purchase higher cost items if they think they are getting away without paying.

    If the order is placed by phone- 9 times out of 10 most the fraudulent customer isnít going to phone in the order. They will purchase online to remain completely anonymous.


    Do you guys think these hold weight? Do you have any different experiences?

  2. #2
    Administrator jkennedy is on a distinguished road
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    Most fraudsters know these rules as well.

    1. it is very common for fraudsters to use the same billing and shipping address, then reroute a package. It gets the order approved on the initial screening. I wouldn't allow packages to be rerouted.
    2. obviously, a $20 order will get much less scrutiny than an order for $20k, but it's not uncommon at all for fraudsters to make smaller purchases to test.
    3. I've seen many phone orders result in fraud.

  3. #3
    Member DennyL. is on a distinguished road
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    I don't think there is any set pattern. A crook will do whatever they think they can get away with. Places like Fedex or other shipping companies allow people to rent addresses. So it's possible to scam by having a parcel sent to one of these drop places.

  4. #4
    Junior Member boonodoh is on a distinguished road
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    Those are good general rules to keep in mind. I have a few more to add as well-
    - fraudster tends to order late at night, like 2am-5am
    - fraudster tends to ask for overnight shipping (so you need to make a judgment call to see if it's weird to ship your product overnight)

    Also, check IP address, make sure not coming from suspicious countries (like Nigeria), or through proxy, etc.

    Some fraudsters charge small amounts to test the validity and limits of cards.

    If an order is especially large, I would make a point to call/contact the customer for specific validation. Credit card companies also sometimes have numbers you can call to verify name/address matching I believe.

  5. #5
    Junior Member boonodoh is on a distinguished road
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    I agree with Shohrab, but want to add that AVS is a pretty old method and only checks the number portion of the address (zip code). I would not reject orders for failing AVS alone.

  6. #6
    Administrator jkennedy is on a distinguished road
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    Quote Originally Posted by boonodoh View Post
    I agree with Shohrab, but want to add that AVS is a pretty old method and only checks the number portion of the address (zip code). I would not reject orders for failing AVS alone.
    Agreed, in fact anyone who is turning down orders based purely on AVS mismatch is definitely missing out on revenue.

  7. #7
    Administrator chargebacks has disabled reputation
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    It's shocking how many companies claim that AVS is only part of their review process only to find that it's all of it. I must make 200 purchases online a month for my job and so many websites automatically decline on avs, a few sites in fact decline existing companies on it. Just silly all around.

  8. #8
    Administrator chargebacks has disabled reputation
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    Here is a little trick. AVS was based on mail order / telephone orders back in the day. It was created to prevent moto fraud, never was developed for ecommere.

    The trick is, as moto orders were typically done at a terminal that only accepted numbers, avs only works with numbers, that said, 123 south street, city, california 94001 will get the same full AVS match as 123 man street, mountain view, california 94001. What is great about it, once the scammer gets a full avs match and the order ships, the post office will typically correct the zip code or the scammer can simply reroute the package. Fact is, if you are declining ordres on AVS, you have insulted many good clients and if you are accepting good orders on the belief that "I never got fraud" then it's not going to be if, but when you loose your merchant account to fraud. I have seen it at least 20 times with people I've worked with and it's always the same "I never knew"

  9. #9
    Junior Member chrislim2888 is on a distinguished road
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    Various combination need to be weighted in determine if this was a fraudulence case, for example:
    - Email validation
    - Credit bin validation
    - High risk country
    - IP from proxy
    - and so on...
    Fraud Detection Solution
    -------------------------------------------------
    Prevent Online Fraud with FREE Micro Plan
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  10. #10
    Senior Member afoley is on a distinguished road
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    I think a crook knows all these rules. Many major companies permit people to rent addresses.

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