What to do if someone use other people's credit card number to make a purchase on your website?

Question

1. If someone stole other people's credit card and make a purchase on a web site, and the victim filed a dispute with the credit card company, the website merchant will receive a chargeback. What should the merchant do to avoid this type chargeback record, especially the web site offers online services which is not tangible goods?

2. Even the merchant proved that this is someone else's fraudulent transaction, will the fraudulent transaction amount counted toward the charegeback amount in the merchant's merchant account? Who will suffer as a victim here - the merchant service bank or the merchant or the credit card issuer? It doesn't make sense to hold the merchant responsible for the fraud since this is an online transaction and there is no way the merchant can prevent this, especially the fraudulent transaction has the correct 3-digit or 4-digit number and correct street address.

3. what should you do? report to the police and get the police to catch those people?

Answer 1

1) Avoiding this kind of chargeback comes down to good fraud screening by the merchant. You need to start with AVS and CVV and then move on to better tools. There are tools out there that can reduce your exposure to these kind of chargebacks. It is called Verified by Visa and MasterCard Securecode. If you use these tools you can never lose a chargeback because the person claims they didn't make the purchase. The reason being they have to use a special PIN number and if they use it that proves they are the cardholder and cannot claim it was stolen or they didn't authorize the purchase. I suggest looking into them. (Keep in mind you still can get chargebacks but these tools will reduce the kinds you can get which means less chargebacks overall).

2) When it comes down to online sales the customer ALWAYS wins the chargeback dispute. This is because only swiped transactions (i.e. face-to-face transactions) are merchants given the benefit of the doubt. But online the merchant always loses their funds with Visa and MasterCard. (With American Express you may win under very rare circumstances). Basically the burden of verifying the user falls entirely on the merchant. That's why you need to make sure you have the right tools in place when processing online.

3) You can report them to the FBI (since it most likely occurs over state lines) but it is a waste of time. Unless the total amount is very large they won't even investigate it. They don't consider it worth their resources.

Answer 2

I totally disagree! Whether the transaction went through or not, a crime WAS committed! If they had not entered the wrong info, the transaction may have gone through! What about the next time that they try? This is credit card fraud, plain and simple! The site where the card was processed should have info on who tried to use it. Although the name will be wrong, the shipping info should be available and the IP address of the computer could also tell who used it. File the report and contact the site owner. Let them know what happened and get any info that they have on the purchase attempt! The next person may not be so lucky! Also there is no telling how many other transactions this person has actually completed! I wish you all the best! Bonnie Ramsey

Answer 3

You don't have to take credit cards. Remember credit card companies want their money that comes from their customers and not the merchandisers. They will even charge the merchandiser a 3% processing fee. It use to be that merchandisers wouldn't accept half the credit cards out there. Your best best is money orders only. Everyone gets paid and there is no ID theft or bounced checks. You might loose customers, but you won't have the problem you are going to be facing.

Answer 4

Yes, report it to the Police, and the web, cite banking authority and tell them that you did file a report.

Answer 5

Lots of valid replies already for this