3rd Party Scam

[jadrem_toys]

Anybody encountered this?

We're a long time seller on eBay and also have our own website.

We received a credit card chargeback on a fraudulent transaction on our website $300.00

We had proof of delivery and contact details so we called the customer who said they received the item, but they purchased it on eBay for $160.00

Hmm!

So is this what happened?

Buyer purchases item from dodgy eBay seller who doesn't have any products. Dodgy eBay seller then purchases an item from another website using stolen credit card details and gets them delivered to eBay buyer.

eBay buyer happy, no complaints got the item, thinks they're from eBay, dodgy eBay seller gets his money from PayPal.

Three months later credit card holder sees the fraudulent charge on their card and claims a chargeback against the 3rd party website that delivered the goods.

Unless you looked into it you'd have no idea eBay was involved, because both eBay buyer and seller are very happy

3rd party merchant just thinks it's another dodgy sale, has no idea they're supplying goods for sale on eBay!!

I've often wondered when I see an item on eBay selling at or below cost, what's going on, maybe this is it.

Comments?

[kopenhagen5]

That's a very clever scam and would require some efforts. A ghost middleman.

A very likely scenario in your case by the sounds of it.

But doesn't mean all items selling below cost fall under such a scam.

I often pick up brand new items for half the price as they are an unwanted gift, wrong one was purchased or buyer didn't need it afterall.

There are some every elaborate scams especially via technology, phones or internet.

And from where I sit, they are on the rise.

I assume you are running your website as a business and I would be asking your bank how you can protect yourself against any such future chargebacks. Insurance available, bank only authorising chargebacks after consulting with your business etc.

[countessalmirena]

Did you send the purchased item to the customer's address? From what you say (that you contacted the customer, and that you had proof of delivery), it would seem so.

If it is so, then I'm at a loss as to how this scam could have worked with an intermediary.

Are you absolutely certain that the customer hasn't falsely claimed unauthorised use of his/her card?

There are a couple of issues that concern me in this story.

1. The address to which you sent the item - same as the customer's own address?
2. Credit card holder doesn't see fraudulent charge for three months...?
3. You sell on eBay and on your website, so conceivably it might be possible for the origin of the order to be mixed up...?
4. How did the intermediary get the card holder's details? If the customer purchased on eBay, presumably they paid via PayPal, which means the middleman would never have seen the card details.

Frankly, I can't make head or tail of what's gone on, other than to say that from the details you've supplied so far, it's at least possible that the customer is the one who's either made a mistake or has perpetrated a fraud. If you have proof of delivery and contact details, you can go to your bank and contest the chargeback.

[davewil1964 · Accepted solution]

The way I read it, the buyer bought from a different seller, who used the OP as a dropship supplier. The seller paid the OP with a stolen card, the owner of which then instituted a chargeback.

The seller is out his goods and money($300), the scammer has the money from the buyer ($160), the buyer has the goods.

[joztamps]

The scam is very elegant.

From the scammer's point of view it has some huge advantages

- he receives "clean" money from a legit buyer, 

- with any sort of luck, there will be considerable time to dissipate that money (and obscure the money trail) before the credit card owner checks, reconciles and reports his loss - and before buyer and seller work out what's happened, and

- if he can keep up his supply of stolen card details, the scheme can be repeated ad infinitum, for any products, and any amounts below the credit card warning trigger thresholds.

[jadrem_toys]

See the message from davewil1964 below is how it works. The credit card and purchase was made on our website by a person in Japan for delivery to an Australian address.

I don't know how long people take to look at their cards or when the credit card company dumps it back on us. However yesterday we received 5 disputed sales from the credit card company all for expensive LEGO which is the eBay fraudsters currency of choice on eBay - for us anyway!

[jadrem_toys]

I had a bit of look around for a seller of LEGO during that period. Found one seller that sold by auction a number of LEGO Saturn rockets (which is the product we're out pocket for) at around 120 to 140 plus post, they operated for a short period. Now nothing to sell on their id. The seller had 1 negative for non delivery during the month and 1 neutral which was in German so i don't know what was said.

[jadrem_toys]

Unfortunately as a merchant you are on your own with card not present purchases, they even quote it's part of doing business online these days.

They recommend that you call the buyer before shipping, which is impossible to do during busy periods.

We had many more chargebacks last year until we moved to 3D secure on our websites, which has greatly reduced fraud.