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How strong is the law on credit card fraud?

8:43 pm on Jan 30, 2010 (gmt 0)

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In other posts I've discussed the problems I've had recently with credit card fraud. I've been doing a lot of searching on this forum to see what others are doing about it.

It seems like there's only so much online merchants can do, and that we're at the mercy of the customers and the credit card companies.

I know there's laws, but the police don't seem to be interested.

Do you think there would be any interest amongst online merchants in trying to get the laws changed to help protect us? I'm thinking of trying to get the laws changed at the federal level. Make the penalties more harsh, make investigation more possible, and give merchants some protection.

The banks would fight it, but if enough merchants got together to support change, it's possible.

Your thoughts?

12:47 am on Jan 31, 2010 (gmt 0)

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at the federal level

That narrows down the discussion a bit. I suspect laws in Australia and Germany differ a bit, maybe you should be more precise about the jurisdiction.
1:46 am on Jan 31, 2010 (gmt 0)

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Credit card fraud online is wire fraud. I believe you can report instances of it on the US Treasury site. You used to be able to, anyhow. But the feds and the police don't care unless it is on a massive scale or a conspiracy.

The one thing I have seen someone do was I think not legal, but it benefitted me. This guy has a website in Europe selling things that are a fraud magnet. When he would get ripped off, which happened fairly often because it was just the nature of the beast, he would put the thief's name and address and the amount owed up on a web page (which was a long list of thieves). I found the page because I was googling the name of a would-be customer with a suspiciously large order. And there he was. I sent the would-be customer an email with just the link on it and voided the transaction. I wrote and thanked the website owner for the page, although I would not be surprised if what that guy was doing was illegal. He sure saved me some bucks on that one.

I should add that on a couple of occasions I have emailed people who have stiffed me about this experience. Both times it resulted in immediate payment.

1:54 am on Jan 31, 2010 (gmt 0)

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I think as the internet as a whole starts becoming a greater and greater force in the overall world economy, politicians will be more likely to side with the businesses. By not doing so, they will be stifling things. I was just reading about internet slander... Situations where people make it their little project to basically try and ruin the reputation of a business or individual. And they were saying the cases being brought to court on those has been steadily increasing each year, and the courts have also started leaning more towards the people being slandered. So the shift may already be happening. But for now, I think it's still an uphill climb, especially for small business. Individual card holders is where they make the real money. So even though people are out there stealing and everything else, they turn a blind eye... Because chances are, that same person who played the "I never got it" game, probably still has 20-30k in outstanding debt that the company is doing nothing but making money on. So they are going to bend over backwards to try and draw in more suc... I mean, customers, to make money off... and they're going to do that by turning a blind eye. So the rules will always favor the customer. But of course... This is the kind of low life, back alley way of doing business that the card companies have been participating in for years now, and it's one of the main reasons why they got into trouble in the first place. Yet, even with all the bailouts, the very activities that created the problem are still taking place... The luring in of young people with extra low rates to get them hooked like a credit junky... the turning a blind eye to criminal activity... the late fees... the huge penalty rate hikes... All that kind of stuff is still going on and will just build the problem right back up again. Financial institutions make billions off people's bad credit habits.
4:57 am on Jan 31, 2010 (gmt 0)

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Proving fraud is difficult to do. If you can't prove it then it's a civil matter, not for the police. You just have to keep all the written records you can. Playing "I never got it" games are really not relevant when it comes to prosecution.
7:14 pm on Feb 12, 2010 (gmt 0)

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Credit card fraud laws are practically non existent. It infuriates me, as sometimes I have details of blatant fraud that I pass to the police. They could literally go to the person's house and arrest them, but they do nothing about it.
11:01 pm on Feb 12, 2010 (gmt 0)

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We don't bother to report fraud to the police anymore. Once we tracked down a related group (30+) of people using stolen cards and even had a working phone number and real address to where one of the persons was living. The police did nothing.
2:45 pm on Feb 13, 2010 (gmt 0)

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he would put the thief's name and address and the amount owed up on a web page

Lord, I hope you're not thinking of doing that!

You'd risk an invasion of privacy suit in the U.S. and probably many other nations. Errors occur and of course many people have identical names. What if the ID is stolen!

In these times, with rising crime and reduced government budgets, expect little help from the law. Besides, for most savvy ecommerce sellers, fraud is a minor concern.

How do you deal with fraud efficiently? You take precautions and have margins that cover that cost.
9:10 pm on Feb 15, 2010 (gmt 0)

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Dealing with stolen cc is hard to do. Best bet is to use AVS and ONLY ship to the billing address. Of course there are instances where you need to ship to their other address but common sense can usually help you with that. Biggest problem I found was stolen CC #'s being used to ship to freight forwarders in FL. Then the stuff is gone and you cant do anything.
11:15 pm on Feb 15, 2010 (gmt 0)

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Lord, I hope you're not thinking of doing that (putting up someone's name, address, and amount they owed)!

No, that's why I said I thought it was probably not legal. As I mentioned, though, that guy was in Europe, and I have no idea what their laws are there about that. I don't know for sure what that would mean legally in the US. Name and address and phone number are public information (unless phone number is unpublished). It's the amount owned and the "Hall of Thieves" page title that would get you in trouble, I think.:)

I don't think the only thing you can do is confine all shipments to the billing address. I would lose a lot of business if I did that. And that does not stop the type who intercepts the package on the stoop. I combine using my intuition in terms of what is normal for my customers AND not selling things that are thief magnets. I got rid of a bunch of things and actually changed the direction of my business years ago because I was sick of the thieves that some of the things I was selling attracted. One by one, I got rid of the widgets I had the most trouble with and expanded in a different direction. This has worked well for me. But I still take risks with customers, esp. with foreign orders. Some of my best customers over the years have been people who would normally just not get sold to by many, I think--no match on AVS, ship-to is different address than billing, etc. I think unless you a complete babe in the woods (accepting orders from people who email and want to know if you take credit cards, for instance), fraud is more dependent on what you sell than on how you vet the transaction.

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