Site online, nothing but fraud orders so far

Wow, 5 fraud orders, my client who I built the store for actually shipped a few items already and lost $11k so far.

How can you detect these things??

The "customers" paid via authorize.net

jokkah:

Wow, 5 fraud orders, my client who I built the store for actually shipped a few items already and lost $11k so far.

How can you detect these things??

The "customers" paid via authorize.netWhat type of products (high risk, easy to convert to cash)?
Where delivering, countries?
Are they using stolen credit cards?
or are they just customers who dispute the order?
What sort of customer verification are you doing before despatch (phone customer, verify access to card)?

gilby:

What type of products (high risk, easy to convert to cash)?
Where delivering, countries?
Are they using stolen credit cards?
or are they just customers who dispute the order?
What sort of customer verification are you doing before despatch (phone customer, verify access to card)?

1. Coins, some expensive ones, mostly expensive ones
2. Looks like all USA
3. Stolen credit cards? Wouldn't have known off hand, right?
4. The orders were processed and settled by authorize.net, after settled, items were shipped, sometime after the client was contacted and apparently the credit card company is holding the payment, hence bogus transaction
5. Sadly, no verification was done. Authorize.net wasn't even configured to require the CCV # on authorize.net payment page, now it is, but it wasn't for these fraud sales. I suggested to the client that she call the customers and confirm the sale, etc before shipping.

I am not sure what happens next, does a dispute get opened with the credit card companies? How about the IP addresses of the buyers, any tracing or investigation, etc?

Frauds using stolen card usually are only able to use it a few times before it gets cancelled.
So they tend to go for high value items.
If it is a sale that is "too good to be true"
It could well be fraud and needs further investigation before dispatch.

A phone call to the "customer" is a start but doesn't guarantee its valid particularly with mobiles.

You could verify that the customer has access to the card.
(I am not sure if authorize.net can do this)
Manually charge them a few cents, (remove their email address so they don't get a copy of the transaction)
Email the customer, tell them you need to verify their card.
Have them email you the amount you have just charged them

If they do confirm the correct amount, then they have full access to the card, so it should be valid (refund the few cents you charged them)
Someone who has stolen the card won't be able to confirm this amount. So refund the sale and the few cents extra, and cancel the order as its fraud.

If you are still suspicious refund the card and request a "Direct Bank Transfer" to your Bank Account.
This may "annoy" a few customers, but if they want the coin they will probably do it.

Are you using Authorize.net's anti-fraud protection? ie: did you ask Authorize.net to enable it on your merchant account?

DrByte:

Are you using Authorize.net's anti-fraud protection? ie: did you ask Authorize.net to enable it on your merchant account?

Now I have some additional protection enabled, such as collecting CCV number, and some serious pickyness when it comes to matching address/zip/extended zip.

I am not sure if my client will be getting her money back though, it is still in limbo. Not sure what the credit card company is going to do...the packages were actually signed for too, so now there is really no way to catch the thieves

As far as getting money back, have the police been notified?

most of the fraud orders use a different shipping adress from the invoice adress.. this is a red flag to look out for since this doesnt happen too often