Halt to re-shipping fraud!

Posted by   Stephen Gallagher

By: Tim Nash

It seems to be an ever increasing problem! Thieves using stolen credit card information to purchase items from websites only for the webstore owner to find the item has been charged back to them due to fraud. Therein is the rub for me. You see, the very same credit card company that approved the original transaction will revert the charges to the vendor when it is discovered the transaction was fraudulent. That's right. They authorize the charge and then take it out of your account as if you had some part in the transaction other than fulfilling a web order for a transaction THEY APPROVED! You can fight the good fight with the credit card company, but twice we have lost the charge-back battle with PayPal because the credit card company that approved the transaction has reversed the charges then insisted our only remedy for attempting to recover our loss is small claims court. After being stung twice for $1,700 worth of Innovate Wideband equipment, I started getting smart. I wanted to create a "Site News" page that could be parsed by Web-crawlers so hopefully other vendors could get wise to the scam and how it works.  

As mentioned, I have been stung twice by this scam but I have received 5 orders we determined to be scams. I noticed these orders always seem to have similarities. Interestingly enough, all of them are for Innovate Motorsports Wideband equipment. Also, the "Customer" has always paid for the highest form of overnight shipping the auto-ship feature our webstore offers. The first time I was scammed, the product was shipped overnight to a "Re-Shipper" in Elkhart, IN. Be aware the Shipping and Billing address matched on these orders. If think you are protecting yourself by screening orders with conflicting Bill and Ship To addresses., you're not. What you're doing is fooling yourself. About a month or so after we shipped the items to Elkhart, we received notice the Cardholder had filed an "Unauthorized Transaction" claim and the total charge had been charged-back from our account. When this happened, I was out: A. The payment for the goods B. The inventory from our shelves. C. The overnight shipping charges. D. No real way to catch or track the product without support from the law enforcement. in said jurisdiction. Nice eh!? All I could do was file a report with my local Sheriff's office. 

 When I researched where the items went, I discovered the Elkhart address was a re-shipping business. I also found several complaints from other vendors apparently scammed in the same manner where they shipped to the same place. Things go along smooth until we receive another notice of charge-back. This time, about a month earlier we had shipped the items overnight ($240 dollars in overnight shipping) to Australia. We had to eat that one as well. Doesn't go over well in a small business to have to eat $1,700.00 bucks.  This forced me to decline any overnight shipping to overseas addresses.

 So what clues should you watch out for?

  1. Overnight shipping. My volume of business is low so it affords me the opportunity to verify the shipping addresses for any overnight shipping request. I try to perform a web-search of the overnight shipping address and see if there is any fraud history associated with it. After you perform a web-search on the address itself, try to perform another and throw in some additional wild-card words like "fraud", "complaint" or "theft".
  2. Do not offer overnight for overseas addresses. It is almost certainly fraud. Unless you personally know the customer, you are taking a huge risk.  
  3. Do not ship to re-shippers unless you know the personally customer and he/she is trying to save on shipping by bundling your items with other items to ship them in one box. If your web-search reveals the address is associated with a re-shipper, I suggest refraining from shipping the items until you can verify the validity of the order.
  4. Addresses with a Suite or innocuous sounding compartment in the 2nd line. Most of the re-shippers have one main address and divvy the the incoming parcels by the customer ID or Suite number in the second line.
  5. Address, Cities or States do not have the first letter capitalized. In almost every single case, the addresses had little to no capitalization.

 I am going to put the charge-back shipping addresses and Re-Shippers used or attempted so web-searches may lead people to this page. I have removed the last 2 building/house numbers from the chargeback addresses so the address is not house or building specific. If you have been a victim of this scam, please send me the address and I will add it to the list.

 Re-shippers: Viabox55335 Corwin RDElkhart, Indiana 46514 Vyking Ship6515 Cecillia CircleMinneapolis, Minnesota 55439 Vyking Ship11535 K-Tel Dr Minnetonka, MN 55343 Other Charge-back address: 2## Electric Rd.Flat.d2f city garden 4North Point, Hongkong Island 1## Pinelands Rd Sunnybank HillsBrisbane, Queensland 4109Australia    


Fraudulent people suck.
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