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Credit Card fraud from Ghana/Nigeria
Beware of credit card fraud in Nigeria!
Hubcap_Ron




msg:641295
 4:22 pm on Apr 27, 2005 (gmt 0)

I'm a hubcap business located in central Indiana. I've been a credit card merchant now for over 5 years. Recently, I've just received and shipped a large order of wheel covers to Lagos Nigeria. The buyer - claimed to own an auto parts store - used two credit cards & requested that charges be equally split between the two. Both cards authorized and processed. The first order was almost $1050 including the freight. That was 5 sets of 2002-03 Toyota Corolla wheel covers - all of which I had on hand. They wanted 10 sets of each style (a total of 30 sets), but I didn't have that many so I shipped the 5 sets that I had. Then they place an order for 10 sets of 2001-02 Honda Accord wheel covers. I charged the two cards (which authorized again) a little over $1000 for the first 6 sets before shipping. That gave me time to get them prepped, reconditioned and ready to go and to be sure everything was ok. Then the day before the first 6 sets were scheduled to ship I get a call from a lady that works at a Baptist Church in Texas requesting information on the individual that made the charge to their credit card! Fortunately I was able to cancel the second order that was charged and return the charge to the church, but obviously the first order had shipped 2 weeks before so I couldn't just return the charge on that order. I'm very thankful that the lady at the church was very nice & understanding about the whole ordeal. We worked together on it (and still are) and I'm hoping - and so is she - that I don't have to bite the bullet. Of course the cardholder can always dispute any charge and not have to pay, but how about the merchant? What happens if her credit card company reverses the charges on me and I lose payment on the first order and all the cost of freight? What recourse do small businesses like myself have against this type of thing? Anyone out there know? Any assistance would be very much appreciated!

-- Ron

[edited by: lorax at 9:47 pm (utc) on April 27, 2005]
[edit reason] No URLs please [/edit]

 

Morgenhund




msg:641325
 7:38 am on Apr 29, 2005 (gmt 0)

Leosghost:

Ok, it has sense :)
And sounds like a good advise -- thank you for that.

oddsod




msg:641326
 8:58 am on Apr 29, 2005 (gmt 0)

Credit Card fraudsters are just like auto mechanics ..

Stop kidding yourself and trying to make out that you didn't do something stupid. Nigeria! What part of that did you miss in the address? It's not like auto mechanics... every order from Nigeria needs to be treated with suspicion, even ones from customers who've ordered before.

Everyone's done stupid things at some time or the other so don't feel too bad. Get over it. It's because you are trying to make out that any smart person would have been taken in just like you were, that Visa and MC issue cards in Nigeria that are genuine, that your naivity (greed?) is common etc etc.... that you are getting all that flak. Most players here would not have fallen for that Nigeria con. That's why they are reacting the way they are.

RailMan




msg:641327
 10:23 am on Apr 29, 2005 (gmt 0)

>>every order from Nigeria needs to be treated with suspicion

no - every order from nigeria needs to be binned. full stop.

diamondgrl




msg:641328
 10:30 am on Apr 29, 2005 (gmt 0)

Think about the pure economics of the order. Would someone in one of the poorest countries on earth - where $1000 might be the better part of a year's income for a wage earner - really order from you, much less in the quantities that they ordered?

From that standpoint alone, this should have raised every red flag in the book.

hfwd




msg:641329
 3:55 pm on Apr 29, 2005 (gmt 0)


>>every order from Nigeria needs to be treated with suspicion

no - every order from nigeria needs to be binned. full stop.

Well - someone from Nigeria actually contacted us, asking if we would be willing to sell (wholesale) a product with FOB shipment AFTER we receive funds from a wire transfer. This guy fully acknowledges that it's difficult to find suppliers that are willing to consider Nigeria due to the extremely high level of fraud there. He even offered to have the money to come from the UK where he has a branch office, and the shipment to be routed from the UK (unfortunately, we have an exclusive distributor there, so can't open another wholesale acct in the UK).

OK now, this got me thinking - he'll wire the money, then we'll ship him the goods. What could go wrong?

The answer? Nigeria is involved.

We passed - didn't want the headaches, even though the order *might* have been legitimate.

Bottom line? I feel sorry for the honest people from that country (whatever percentages they may be).

Habtom




msg:641330
 4:42 pm on Apr 29, 2005 (gmt 0)

Didn't receive any of those orders yet, but I am always scared of shipping without noticing from where it is ordered. Not sure if I have to keep eyes on things always . . .days in and days out?

Habtom

chodges84




msg:641331
 5:40 pm on Apr 29, 2005 (gmt 0)

I had an odd one today from some one in Michigan oddly enough. It was just an enquiry though, but he wanted 100 of something as soon as possible, didn't mind about shipping costs (even though we are in the UK and you can get the item we sell for about half wahgt we sell it in the US). Binned that one straight away. If it's legitimate I could be 1000+ richer, but i don't want to risk being out of pocket. I actually ususally consider the US to be ok, but Fraud exists everywhere.

RailMan, I really feel for you, if i was in your posistion, I'd be gutted, not just because of the money, but I'd feel i was taken for a ride by someone i trusted.

Unfortuantely if you aren't aware of fraud in Nigeria etc. then you stand no chance, why would you think it would be fraudulent? You either know it or you don't. I was lucky and found this forum within a week of opening my store, and there was a thread about it right at the top, it was very interesting reading. I've only had one offer from Nigeria, but if i hadn't have read that thread on this forum, I am sure I would have taken the Order, I'm only young and the extra 2000 or whatever would have been very welcome.

btw, They often order a small quantity first just to get your trust, and then may get a big order up to gether and thats when they hit you. You got to feel sorry for the genuine Nigerian traders, If the fraud carries on, then the whole Nigerian Economy is under threat.

Just my 2 cents though.

Craig

Rugles




msg:641332
 6:51 pm on Apr 29, 2005 (gmt 0)

>>>If the fraud carries on, then the whole Nigerian Economy is under threat.

Too Late!

Hubcap, we just find it hard to believe that someone in this day and age could still be taken by a Nigerian fraudster. But, I guess if everyone is wise, then I would stop getting hourly emails from Prince So-and-So.
You can be sure, as somebody suggested, that the first purchase was to gain your confidence.
There was an excellent thread on this board about 4 months ago where we all assembled a list of reasons to suspect when an order is fraud. If you do a site search for "fraud" or "credit card fraud" I am sure you will find it. You would be wise to read up on the topic and take the valuable advice that we came up with. Good Luck!

RedWolf




msg:641333
 11:04 pm on Apr 29, 2005 (gmt 0)

OK now, this got me thinking - he'll wire the money, then we'll ship him the goods. What could go wrong?

A wire transfer can be recalled. It is more difficult than a credit card, but not impossible. Also if it is coming from a bank in a different country, there is a good chance that it is an account that has been compromised in which case you would be accepting stolen money which has it's own dangers. Basically if it is not from the US, Canada, Western Europe, New Zealand, or Australia I trash it without a response. And anything outside of the US gets a phone call to the cardholders bank to verify the address and some of those still get rejected if they feel funky. Even odd US orders sometimes get the full call the bank and maybe the customer treatment just in case.

incrediBILL




msg:641334
 11:23 pm on Apr 29, 2005 (gmt 0)

I'm not sure why in this late day and age of ecommerce that this is even a discussion topic.

Large international orders are like virus emails, if you don't open them you won't get burned.

Nigeria and Indonesia are well known for this type of activity. However, when an order is above a certain amount for ANY foreign country you have to just ask for a wire transfer to protect yourself.

Some web sites automatically skip the credit card page on large (or any) foreign ecommerce transactions and just save the order and display directions "How to wire transfer funds for your payment" as this also avoids the percentage of fee you get charged for the fraud credit card transaction (you'll never see that money again) and avoids additional refund and/or chargeback fees.

If your web site doesn't do this already, get it custom modified ASAP to save yourself a lot of grief and wasted fees on international fraud sales.

HRoth




msg:641335
 9:49 am on Apr 30, 2005 (gmt 0)

I think the Nigerian fraudsters operate not with government support but with government "winks." Look at the wording to this warning about fraud from the Central Bank of Nigeria.

[nigeriaembassyusa.org...]

"This warning is, therefore, specifically intended for the benefit of those misguided people who, in the quest to make easy money at the expense of Nigeria, are defrauded by international fraudsters." Note that this makes out the defrauded as predators who want to take advantage of Nigeria. Also, towards the bottom of the document they put the word "victims" in quotation marks. I think this shows a lot about the attitudes of people in Nigeria towards fraudsters there, i.e., that people who get defrauded by "international" scammers deserve it because they intended to rip off Nigeria.

Still, I believe it gives one a false sense of security to focus on countries like Nigeria as the source of most credit card fraud. There is much more sophisticated credit-card fraud out there that originates here in the US and only seems to be coming from other countries, such as Russia. Check out this article about it:

[sfgate.com...]

I was shocked to read this article and realize that I had no idea how complicated and deliberate these schemes were. The Nigerian fraud schemes are blunt instruments in comparison.

diamondgrl




msg:641336
 1:33 pm on Apr 30, 2005 (gmt 0)

It does depend, of course. Today we got a large order from Russia, did a basic gut check, it didn't smell too fishy and we fulfilled it.

Our fraud rate is very very low (<.1%), at least when we weed out the ridiculously obvious Nigerian and Indonesian and other orders. But we have shipped successfully to dozens of countries, including eastern Europe (uncommonly), subSaharan Africa (very rarely) and Southeast Asia and South American (much more frequently).

But we have items for serious professional only and I would imagine that if you are selling, say, stereo equipment, your fraud rate will be many times our rate. So don't dismiss it out of hand but be aware of the risks and do some basic sanity checks and never ever sell to a small handful of countries, no matter what.

jsinger




msg:641337
 3:07 pm on Apr 30, 2005 (gmt 0)

Nigeria has a law to prevent certain funds from leaving the country (section 419). These "Letter Scams" violate that law. The intended recipient of the huge wire transfer is seen as conspiring to violate that law. That's why Nigeria considers itself to be a victim.

If you were to go to Nigeria to complain, as some have done (and one or two have been killed doing that!), you could be charged with a crime.

jsinger




msg:641338
 3:13 pm on Apr 30, 2005 (gmt 0)

I always wondered why the US postal service delivered obvious Nigerian Scam letters back in the pre-email days when these things came in by regular mail. I would get about one a year. The letters were always obvious (and postmarked Nigeria, of course). OUR post office was being used by foreigners to defraud Americans.

oddsod




msg:641339
 3:20 pm on Apr 30, 2005 (gmt 0)

>>section 419

AFAIK, section 419 deals with fraud.

Essex_boy




msg:641340
 5:13 pm on Apr 30, 2005 (gmt 0)

The British embassy in Nigeria has stopped accepting applications from Nigerians aged between 18 - 35, I cant imagine why.

They claim that during a redocrating phase these applications cant be processed. Of course....

hfwd




msg:641341
 5:36 pm on Apr 30, 2005 (gmt 0)

Well, I think it's a general consensus so far that orders from Nigeria & Indonesia should not be fulfilled.

Credit card scammers, however, are everywhere. Has anyone had any experience with a credit card fraud screening service like preCharge? Is it worth the cost?

HRoth




msg:641342
 9:58 pm on Apr 30, 2005 (gmt 0)

I have been using MaxMind and just started using the Fraud Suite from Authorize.net. The latter is good for blocking multiple attempts within x amount of time and for blocking certain servers altogether. I was getting periodic attempts to put through, for instance, 50 credit card purchases for $3500 each, all coming from the same ip address. It is worth the monthly fee for Fraud Suite just to save the fees I was paying for all those bogus transactions and the time spent voiding them and dealing with the banks that issued some of the card numbers. But the Fraud Suite is not as sophisticated as it should be, to my mind. Believe it or not, since I put Fraud Suite in place, one of these individuals has contacted me by email to attempt to find another way to pay for goods. I recognized the shipping address. Talk about yr brass gonads.

To me, MaxMind is handy for getting a sense about the fishyness of foreign transactions. You get a score of fraud probability. It uses info like distance from ip address and billing address, whether the bin number matches the bank name (if you have the bin number), assigns risk factors to each country, etc. It has helped me make decisions about whether I want to process a transaction or not. But it often has problems recognizing foreign city names, and so will give a higher fraud probability than is really the case.

Neither MaxMind nor Authorize.net's Fraud Suite is totally satisfactory, as far as I am concerned. I am interested in what people have found especially useful for screening foreign transactions. I want to do more of them.

Hubcap_Ron




msg:641343
 6:02 pm on May 3, 2005 (gmt 0)

I guess then taking the gamble of a chargeback fee is no different than spending money on the slots in Las Vegas - although perhaps much cheaper! My credit card processor only charges a $15 chargeback fee. And if you guys aren't checking you credit card statements every month, then there's always the possibility that the merchant may not lose. I have a Capital One card and they allow you only 60 days from the date of the billing statement with the charge in question to dispute it. So what do I have to gamble? $30.

*** Hmmm ... now wouldn't that just be funny if it was my own credit card that the scammer charged?! Hold on a moment while I check my statement .......

Now here's an interesting point: I STILL have complete communication with this "Nigerian" person via email. I've led him/her/it along to believe everything's still aok. Just having email contact probably don't mean squat as far as nailing the person. But I wonder what I can do to him? I have a friend here that's a computer whiz that could probably send an email virus to him & put him offline until someone sends him some more computers. heheehheh! No don't get me wrong ... I'm not the type that's always looking for revenge, but in this case, I think there's a little fun that can be had. Any thoughts?

oddsod




msg:641344
 6:40 pm on May 3, 2005 (gmt 0)

CCF/419 baiting is a sport in itself and there are several websites dedicated to it. It takes cunning and time to get back at the Nigerian crooks. Even if you do have both in abundance it's highly unlikely to get you anywhere beyond getting him to send you a photo of himself holding up a "I'm a pratt" sign i.e. some humiliation. Except that he will remain oblivious to the point you've scored.

I have a friend here that's a computer whiz that could probably send an email virus to him & put him offline until someone sends him some more computers

He likely doesn't have a computer; he uses a cybercafe. He probably has a Yahoo email account (for some reason they tend to prefer it over Hotmail) and is not very computer literate. In fact, he may even be a she... or a group of people.... or a company setup for the purpose of defrauding oibos (YOU!). His entire life has been a course in the survival of cons... and in the conduct of them. Don't flatter yourself that you are any competition in the "animal cunning" stakes. You can play games to take advantage of his lower education, his less than brilliant command of English, and the fact that you are in a rich country. But for every $10 hour you spend his unemployed butt can afford to waste several days. The last laugh is on you.

Any thoughts?

Yes, cut your losses. Move on.

RailMan




msg:641345
 9:08 pm on May 3, 2005 (gmt 0)

>>Any thoughts?

yup, put this behond you, move on, save up for a nuke to point at nigeria ............. it's the only way to stop the fraud ........ :)

jsinger




msg:641346
 6:11 am on May 4, 2005 (gmt 0)

I've commented before that T. Roosevelt would have dealt with the (pre-email) Nigerian Letter Scam problem by anchoring a battleship in Lagos harbor with all 16 inch guns aimed at one spot...the Post Office Building. No need to fire a shot.

Those millions of scam letters that flowed into our country for decades constituted an attack on our citizens. Why did we do nothing to stop it?

And why did our government deliver the letters that arrived here? The PO has the power to suspend mail service.

RailMan




msg:641347
 10:20 am on May 4, 2005 (gmt 0)

>>And why did our government deliver the letters that
>>arrived here?

it's good for a government to allow fraud from other countries - while you're thinking about how the nigerians / indonesians are ripping you off, you're not thinking about how your government is ripping you off ............... :)

grandpa




msg:641348
 11:24 am on May 4, 2005 (gmt 0)

>> It won't happen again.

Forget I ever said that. I cannot believe what I am about to tell you. We got an order from Nigeria, followed up by e-mail stating that a money order would be dispatched. The normal discussion ensues on our end, and a wait-and-see attitude is taken. That was a week ago. This week another e-mail... opps, it said, <paraphrased> "my associate sent you the wrong money order. Can you please cash it and remit the balance, less the cost of the original order, to my associate in Nigeria?"

Why of course... NOT! The matter came to and when I added the e-mail address to a delete filter.

Some people, for some reason, still cannot resist the lure of the scam, even when they know its a scam.

Any thoughts?

Just one Ron. Run the e-mail to the bit bucket and move on. Encouraging them doesn't do a bit good for anyone.

PCInk




msg:641349
 12:20 pm on May 4, 2005 (gmt 0)

> My credit card processor only charges a $15 chargeback fee...So what do I have to gamble? $30

That $15 is the fee for processing a chargeback. You cannot keep the amount originally put through your account. You will lose:

1) The items you sent (and postage paid for it)
2) The credit card processing fee charge
3) The amount orignally sent to you
4) Your chargeback fee

If I sent a $100 order and it cost me $50 and processing charges are 5%, then I would lose

1) $50 (products) + postage
2) $100x5% processing fee ($5)
3) $100 (order amount)
4) $15 chargeback fee

So for $100 you gained $100 then lost $170+postage, leaving you $70+postage out of pocket.

hfwd




msg:641350
 3:25 pm on May 4, 2005 (gmt 0)

PCInk,

I agree with you. You're absolutely right - but the original post's point that it's a "gamble" in a sense that some people don't peruse their credit card statement close enough to see that a charge was made fraudulently and therefore let it go.

If it is a gamble, it's bad, bad odds.

oddsod




msg:641351
 3:43 pm on May 4, 2005 (gmt 0)

If it is a gamble, it's bad, bad odds.

Knowingly taking somebody else's money on the off chance that they won't notice?

I wouldn't call it a gamble, I'd call it fraud.

And if you guys aren't checking you credit card statements every month, then there's always the possibility that the merchant may not lose

Or is this not fraud/theft (albeit of a slightly different flavour)?

oddsod




msg:641352
 2:40 pm on May 5, 2005 (gmt 0)

Seeing that Hubcap_Ron is otherwise busy may I pose another question to you guys? Even if the eventual card holder didn't end up losing - but the credit card company/bank turned out to be the loser - would you still keep the money? Would you build your business on that model?

RailMan




msg:641353
 7:40 pm on May 5, 2005 (gmt 0)

>>Even if the eventual card holder didn't end up
>>losing - but the credit card company/bank
>>turned out to be the loser - would you still
>>keep the money? Would you build your business
>>on that model?

No.
1 - Fraud / theft is still fraud / theft no matter who the perceived loser is.
2 - Credit card companies (like all successful businesses) pass on their costs to their customers. The cardholders will still lose out.
3 - If we get caught keeping money we know we're not entitled to, card companies may penalise us by cancelling our merchant accounts (it may even be in their terms). The potential damage from termination / blacklisting is likely to be more than the potential income from the odd fraud or two.

obiroyce




msg:641354
 6:04 pm on Jun 7, 2005 (gmt 0)

I'm posting this in reply to what diamondgrl posted.
I'm from Nigeria and I know that the mere mention of Nigeria makes most guys from western countries suspicious but one thing I think everyone ought to know is that Nigerians should not be blamed for what is happenening because most people in the country are somewhat poor but the country is not poor but what is causing the main problem is the government.Considering the resources here Nigeria should be richer than UK & USA but that's not what it is. So my advice to everyone is to be alert but not to take a Nigerian as a fraudster.

Rugles




msg:641355
 9:11 pm on Jun 7, 2005 (gmt 0)

>>>Nigerians should not be blamed

Absolutely, I do not blame an entire population for what a few do.

However, I would never, ever accept an order from that area of Africa. Just too risky. You have to understand that I am running a business to make money, not lose money. I have to feed my family, just like everybody here, we are not running a charity to help the fraudsters in Nigeria.

They have ruined it for you and I feel sorry for the honest souls in Nigeria. But it is not my problem to figure out who in Nigeria is honest.

Good luck to you.

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