Got Screwed Big Time - Need some serious HELP!!!!!!!!

on-ramp · 04:28 PM

Somebody used a stolen credit card (unknown to me at the time) to buy 2 items from our on-line bookstore.

The cardholder saw the charges on their account and is now doing a charge-back, in the amount of $2,600!!

Basically my on-line Yahoo Merchant provider, Paymentech says there is nothing I can do, since I take the risk in processing CCs and when I ship out an item...Even if the card seems legit, I take the risk and they can do a charge-back anytime.
But they process the card, too, correct? So i'm guilty until I fight everybody to prove myself innocent. That's how it works....I'm out $2600 because the on-line store processed the card, everything seemed fine, and I hit the "sale" button and shipped out the items. No Seller Protection, whatsoever.

I'm fuming mad tonight.

what recourse do I have? Thanks for your help.

Wayne, please shed some light since you also accept on-line CCs.

alf · 10-06-2005, 05:06 PM

I went through the same thing with my site about 5 years ago for $5,000. No recourse, merchant bears the cost, not the cardholder or the card issuer. Visa/MC adds absolutely NO VALUE for the 3% that they charge.

It was a very expensive lesson for me to learn. I am much more anal with taking cards, process them myself and have foiled several attempts of fraud as a result.

alf

ubiquity0 · 10-06-2005, 05:29 PM

Hmmm... I always assumed that the protection offered by credit card companies was basically a guarantee on their part to reimburse card holders out of their pocket if a card is stolen & used fraudulently. Basically the 'protection' that the card company provides involves taking the money back from the (innocent) merchant?!

Doesn't this mean that taking a credit card payment online (through paypal or whatever) is really barely a step up from accepting a Nigerian cashiers check??

Has it been delivered yet or still en-route?

on-ramp · 10-06-2005, 05:37 PM

delivered..
but I will try to file claim with UPS and see where that goes, probably nowhere since they will say item was shipped, sorry, it's not our problem.

Hugh R · 10-06-2005, 05:43 PM

Ask Wayne, I think he has had lots of these issues. On-ramp, remember when I bought a front A/C condensor from you? If I remember correctly we had "The checks in the mail issues" but we worked it out. Sorry for your loss.

creaturecat · 10-06-2005, 06:10 PM

happened at my wife's store - the bank covered it

alf · 10-06-2005, 06:15 PM

Quote:

Originally posted by ubiquity0
Hmmm... I always assumed that the protection offered by credit card companies was basically a guarantee on their part to reimburse card holders out of their pocket if a card is stolen & used fraudulently. Basically the 'protection' that the card company provides involves taking the money back from the (innocent) merchant?!

Yup! The card companies do nothing to protect the merchants. In fact, i even called the card in for an authorization before i made the $5000 charge, they gave me an auth # and the green light that all was kosher. Their excuse was"we did not know it was stolen at that time, it is your fault for taking our word for it."

Now i only ship to the billing address of the card, demand to see ID with that shipping address on it and call the issuing bank to make sure that the address matches the number.

alf

ed martin · 10-06-2005, 06:22 PM

Basically you've lost whatever the cost of the inventory was plus the shipping so it's not actually $2600 cash. I mean you've got to verify the issuers identity in any transaction, especially for a significant sum like $2600. You may have yourself to share at least some of the blame in this. Sorry.

Seems to me you would have recourse in court to whomever you shipped the items to.

kycarguy 935 · 10-06-2005, 06:49 PM

When I was working at Tweeks many moons ago I remember we had many problems like this. I dont remember what we did to counteract the loss. I know we got proactive when accepting sales for larger amounts being put on a credit card.

on-ramp · 10-06-2005, 06:50 PM

the charge-back hasn't happened yet. should i close down my checking acct?

alf · 10-06-2005, 06:59 PM

My card company charged back before notifying me what happended. Woke up one day and found $5000 missing from my account and had to chase it down myself. Yes, it is screwed up.

Even if you close down your checking acct, they will find you and come after you. You are afterall a law abiding citizen, they know where you live and where your business is located. The scammer is long gone.

Where was it shipped to? US or International?

alf

on-ramp · 07:28 PM

International to Northern Ireland.

everything checked out across the board, all green lights so I went ahead with the sale. how come Paymentech doesn't protect me? m'fers!

I'm not to blame. I did everything right according to their rules! this is so ****ed up.

this was our very first on-line sale too, outside of ebay, so it's a b*tch to lose all our profits for the last 2 months, all the work we put into running our business, gone, in one sale.

turbo6bar · 10-06-2005, 07:29 PM

BTDT, on-ramp. I wish I had some good advice for ya.
best of luck,
j

on-ramp · 10-06-2005, 07:31 PM

j, thanks man.
BTDT? sorry, not familiar with that acronym.

turbo6bar · 10-06-2005, 07:36 PM

been there, done that. I was taken with a fake online escrow company. I just ended up eating the loss.
jurgen

dtw · 10-06-2005, 07:54 PM

Address verification system codes
Address Verification System (AVS) codes are generated at the time the merchant requests credit card authorization. The code tells the merchant if the billing address provided on the order matches the billing address of record for the credit card number. Specific codes mean different levels of matching. For example, the credit card payment company Paymentech(c) (one of many such companies that offer AVS) uses the following AVS response codes (among others):

I-1 means the billing address on the order is a complete match to the billing address of record for the credit card provided.

I-5 means that only the Zip Code doesn't match; perhaps the customer has been issued a new one without updating the billing address of record.

The codes to worry about are I-4 and I-8.

AVS code I-4 means that the street address isn't a match, while the Zip Code does match. Blocking such orders may seem to be a given, but there's a slight problem. AVS logic looks for a number at the beginning of an address. Addresses that begin with a letter aren't recognized and result in an I-4 code. Too many customers use addresses that begin with a letter (P.O. Box 100, or One Rockefeller Plaza) to make this a suspect code.

AVS code I-8 means that nothing matches - the street address and the Zip Code are both different. Perhaps the customer moved and forgot to change the address, but this is probably an NCE attack, which is sending randomly generated credit card numbers with the addresses of their forwarders in both the billing and ship to address fields. Beware.

alf · 10-06-2005, 07:54 PM

Make noise with your processer anyway...

In the future ship only to the card's billing address and verify the address with the issuing bank, especially for international orders.

I was upset for weeks, did not help me get $5000 back, so i accepted the loss as a cost of doing business and wrote it off. Lesson learnt.

HardDrive · 10-06-2005, 07:56 PM

I hate to say it, but there is a reason many merchants will not ship overseas. Sites like Newegg.com where I buy computer parts have extenstive checks in place, and I have had them flag transations over VERY minor inconsistancies. They typically do not ship for at least 2 days while they check out your card.

You will find that things can be equally dicey with cashiers checks, as people with forge them.

dtw · 10-06-2005, 07:57 PM

http://www.merchant911.org/

tabs · 10-06-2005, 10:53 PM

I'm very sorry...