*This Is A Posting ID*
We are a large, multi-channel business that sells on eBay, Amazon and direct websites. Our direct sites have seen a huge increase in credit card chargebacks in the last month and a half. While investigating this situation, we have discovered a fraud ring operating on eBay that appears to be massive in its scope and sophistication.
This fraud ring lists items for sale on eBay, then when they make a sale, they place the order on one of our direct sites to ship to their buyer. It’s pretty basic retail arbitrage, but they are using stolen credit cards to do it. We have identified more than 800 orders, totaling over $40k in sales that we believe are part of this fraud.
So far, we have discovered 17 selling accounts engaging in this fraud. All of them have been reported to eBay. After two weeks of back and forth with eBay support via email, they have finally shut down 13 of the 17 accounts. Of the 4 accounts that are still operating, one even has a neutral feedback that says ‘Sent with someone else’s CC # at double the price I paid. Said “No worry”’ . We brought that feedback to eBay’s attention in the report, but they still have not shut that account down yet.
We wanted to bring this to the attention of other sellers, both to see if anyone else has experienced this and to warn others to keep an eye out for this kind of suspicious activity. We don’t want to give out too many details publicly at this time, but a few things to look out for are:
Single item orders – On our direct sites we usually have some kind of free shipping or free gift over $X promotion running, so people typically buy multiple items to get to that minimum. We do get single item orders that are legitimate, but 20-30+ orders for the same single item in a short amount of time is not typical for us and would be a possible red flag.
Different bill to and ship to addresses – Again, we do get legitimate orders that have different bill to and ship to addresses, so different addresses doesn’t automatically mean they are fraud, but we are seeing far more than usual in the last month or so. The fraudsters seem to have the correct billing info because it does match the address and CVV checks. Once they verify that a card will go through, they use that same card repeatedly, so look out for same billing name/address being used repeatedly with different ship to addresses.
I would guess the fraudsters probably target larger multichannel sellers like us because they know at the volume at which we operate, order processing and fulfillment is more likely to be automated and fraud is less likely to be noticed than a mom and pop where only 1 or 2 people manually handle all aspects of every single order.
If you suspect this fraud is happening to you, here are a few things we have found in common among the fraud sellers.
Low Price – They don’t care if the price on our site is higher than what they sell it for because they aren’t paying for it. All they care about is getting a high volume in sales, so typically they will undercut the average price by at least a few dollars, sometimes as much as half the regular retail price.
Title & Description – Titles, descriptions and just general style of the listings across all of these sellers have a lot in common.
Handling Time – So far they have all had extended handling times.
Returns – So far they have all had “seller does not accept returns”
Items currently for sale and past items sold – they typically have less than 10 active listings at any one time that they cycle through. Their feedback history shows a pattern of listing products in one category for a while and then, presumably when someone catches on and starts canceling their orders, they shift to a different category. They are not focused on just one category or type of product, they are just looking for hot sellers, so every category is a possible target. We are definitely not their only victim.
Sold History– if the suspected fraud listing for that item has sales within 24 hours of you receiving orders for that item, it’s possible they are using you to fulfill those sales.
Unfortunately, feedback isn’t very helpful in IDing them. Most of them are 98% or above with very few negatives. Either they get negatives removed, or just as likely is that the eBay buyer simply has no reason to complain. They order an item at a great price and most of the time that correct item shows up on their doorstep in a few days. They may not even look at the company name on the invoice or even if they do, they may not care or realize what is going on. They got what they ordered and are none the wiser as far as the fraud aspect of this is concerned.
