Fraud

[filburt1]

First, the Jelsoft server is slow as hell today.

Second, I have been the victim (several times) of receiving payments via allegedly stolen PayPal accounts. I have delivered the goods via IPN (vB's subscriptions process), then supposedly the actual account holder finds out later, issues a buyer complaint, and every time PayPal sides with the buyer and revokes the funds. Hence, the user gets the software for free.

Are there any other payment handlers that:
1. Are based on the US,
2. Offer better seller protection, especially for intangible goods which PayPal doesn't cover,
3. Do not require buyer membership to send payments,
4. Have policies specifically towards being the victim of receiving stolen funds, and
5. In which the seller can accept major credit cards?

I am dissatisfied with PayPal's dispute resolution center, which first clearly sides with the buyer, and second offers virtually no avenues for placing followup on a claim, only a very linear, multiple-choice-like system that frequently doesn't allow for the seller to defend himself against the buyer.

[Zachery]

My best suggestion for the time being is to ship every person a cd and add it to the cost (another 5 bucks). Once you ship a physical good (put the un/pw on there too) You have freed yourself up from some fraud charges.

[filburt1]

My best suggestion for the time being is to ship every person a cd and add it to the cost (another 5 bucks). Once you ship a physical good (put the un/pw on there too) You have freed yourself up from some fraud charges.

I am hoping to avoid this, mainly because a significant percentage of my customers are international. It would also be difficult and increasingly expensive to provide product updates, which, just like vBulletin, require replacing files, templates, phrases, etc.

I also do not feel it could help much in this instance, as the root cause of the use of stolen funds still exists.

[ManagerJosh]

Unfortunately there's a problem with buyer/merchant laws. Regardless of who you select as your credit card processor Filburt, the processor will ALWAYS side with the buyer. It's very difficult process to get it resolved and have them side with you.

My suggestion is give them a call, and dispute this under the fact that PayPal is responsible and that you aren't since you don't have the tools to be able to verify each transaction is legitimate. You could also attempt to see if PayPal will cover you with merchant protection since they should be offering some sort of protection.

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Call us at: 402-935-2050

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[Forum-Style]

I so understand what you are going thou, we used IPN with paypal and had the same charges, some being of over £50.00 then to also get charge back from paypal for it also another £7 due to there costs. Its very sad.

The way we cut it back but over 70% is to create a new forum that the user MUST post in with the payment details, this then gets a post stateing there request, we then send the file info to download from our forums pm system. This the confirms the real email address of the user, and also there IP address, then on charge backs we can place a server wide ban on the accounts. Also we added a proximity checker to get real IP. Its does not stop it happening 100% but like i said its cut it back over 70%, we lost a few sales due to the effort to make the post and so on, but we rather lose money than get these charge back requests and also lose of goods.

[Zachery]

I am hoping to avoid this, mainly because a significant percentage of my customers are international. It would also be difficult and increasingly expensive to provide product updates, which, just like vBulletin, require replacing files, templates, phrases, etc.

I also do not feel it could help much in this instance, as the root cause of the use of stolen funds still exists.

But only the initial product must be shipped, and its not that expensive to ship a cd. once the item has been shiped paypal sees that you held up your end of the bargin

[Guest]

But only the initial product must be shipped, and its not that expensive to ship a cd. once the item has been shiped paypal sees that you held up your end of the bargin

You would be surprised how much it can cost to send a cd, once you go oversea's the prices start to go up a lot. I remember shipping 5 cd's to the UK once, cost about $30 IIRC.

The point of the internet is to move data without handling it with 'snail mail'. Maybe the lot of you should get togther and complain to the proper people so you can attempt to get the laws changed or modified.

[tgillespie]

Have you looked into different payment processors such as WorldPay or Authorize.net? I use PayPal and 2CheckOut, but have found that 2CheckOut is very week when it comes to customization and system integration. They also take a large commission as well

In the past; PayPal has been very difficult to deal with when it comes to claims. I had to stop accepting PayPal subscriptions due to the fact that customers can cancel anytime without first notifying me. I now have setup a system which sends a non-subscription bill in which they can choose to pay or not pay. If they have not paid within 10 days, their account is terminated. A more personal claims department at PayPal would surely be welcomed.

[Freddie Bingham]

If you think just shipping something to the user is going to cover you, think again. The person then, instead of "Fraud", just claims "Non Delivery". Paypal still take your money unless you can show them a trackable number that shows delivery to the person. Don't even ask how much it would add to your bottom line to ship international via a trackable method.

I know this from selling on eBay and having international buyers do this to me, as Airmail is commonly used to ship and it is not trackable. I no longer will ship International via Paypal unless the buyer purchases EMS shipping, which has some level of trackability. Still often the tracking will end with the items displayed as being in the hands of customs as the Post Office ends their tracking and insurance support at the point of hand over.

I haven't had a non delivery claim failed against an EMS package yet, but I wouldn't be surprised in the least if paypal still sided with the buyer since the tracking doesn't show a final delivery to them.

Your best bet is to not just take paypal from international users and send something physical to USA users via delivery confirmation. You can use delivery confirmation with Media Mail.

[chrispadfield]

*Hopefully* verified by visa and securecode from mastercard will fix the obvious inbalance between buyer and seller (removes the cardholder not present chargeback option); however it seems that these initatives have been very slow in coming, I think phishing has something to do with this; until people can be educated into knowing where to enter the code (only visa/mastercard websites) they would probably not help.

I will add that other processors act pretty much the same way as Paypal, worldpay are just as useless and always side with the buyer.

[tgillespie]

I will add that other processors act pretty much the same way as Paypal, worldpay are just as useless and always side with the buyer.

Thank you for the precaution. Not that I was ever going to use WorldPay, but I will try different solutions now, if need be.

[chrispadfield]

Thats up to you; but worldpay is still pretty good (especially for UK companies) however legally they have to side with the buyer over any digital purchase; same thing with who ever you use and whatever you purchase. - Apple will have exactly the same problem with itunes for example.

The credit cards work in favour of consumers; this is important so that consumers have trust in using them. The problem is that a minority of unscrupolous customers can use the rules to their advantage. The key is to detect those people and not sell to them.

[ManagerJosh]

Thank you for the precaution. Not that I was ever going to use WorldPay, but I will try different solutions now, if need be.

I said that earlier that all processors side with buyers

[Skeptical]

Paypal is a sack of s**t, literally.

They cannot control fraud, and get their user accounts stolen, yet it's the merchants that have to eat the losses? That is pure nonsense. Tell me, how in the world is a merchant supposed to screen for fraud when Paypal accounts ordering products/services show a "verified" status?

Securing/screening their system against fraud occurs completely on their end. It's not like credit cards, where the cc companies have no control over theft. These clowns control who, what, where, and how. When their user accounts get stolen, it's their fault, not the merchant's.

Paypal should be the one to pay theses fraudulent losses, not merchants.

The other issue is with the concept of an escrow. If it's their position that Paypal isn't an escrow service, then money that's lost is money that's lost, period. However, if they are acting as an escrow, then it is their responsibility to reimburse merchants for all losses.

I would never take Paypal in any ecommerce site that I build. If a user has a Paypal account he/she obviously has a credit card too. I will play no part in helping this evil company make money.

[Jan Klerks]

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