The eBay Credit Card Fraud Scam

There has been a scam running on eBay that has cost us a lot of money recently and we just wanted to share how they did it.

Triangulation Fraud is a clever way where we unsuspectingly do the work for the crooks and it takes us a long time to figure out that we have lost money because of a time lag they create.

What They Do. Triangulation Fraud.

1. The crooks start a new shop on eBay. They list some of the products that we sell and make them a bit cheaper.

2. A real customer shopping on eBay places an order with the crooks because it looks like a good deal. They pay with real money.

3. The crooks then come onto our website and place an order for whatever the real customer wanted, they give us the real customers name and shipping address but fake contact details. They pay us with a stolen credit card number that has not been reported yet.

4. We send the goods to the real customer, accidentally helping the crooks. It is not until a month or two later that the person with the stolen credit card finds the charge and reports their card numbers stolen.

Why it Works Well.

The scam works well because:

1. The real customer is happy. They got what they paid for and they have no reason to suspect anything is wrong.

2. eBay is happy. Although a fraud has happened they say it wasn't anything to do with them. The crooks shop on eBay supplied what they promised to the customer, and what crooks do in their personal time is not eBays responsibility.

3. The person with the stolen credit card number is "happy". Well not happy, but they get their money refunded by the Credit Card company.

4. The Credit Card company is happy. They take the money back from our account. They wash their hands of any responsibility because online sales are not covered by their security systems. They are also slow to let us know about the frauds because the costs don't affect them.

5. The crooks are happy. After a few days of running they have collected thousands of dollars and have at least a month head start. They withdraw the money, close down that eBay account, start a new one and repeat.

Our Frustrations.

Even when we spot the fraud order before we send it, there is little we can do. We know the details of a stolen credit card but the banks will not cancel the credit card or even let the owner know that their card details have been stolen. So although we might be ok this time, the next shop will get caught out.

For us it's frustrating, not that there are some dishonest people out there, but that it's so hard to get anything done once we know about a problem.

We use all the security systems that eBay and the Credit Card companies make available yet they are not good enough to stop the crooks.

Our Hopes.

At the moment all the costs of the loss fall on us. We hope in the future eBay and Credit Cards will make their security better, or take some of the responsibility for its shortcomings.

eBay can be a source of some great bargains for cheap things shipped from China but it is generally more expensive for most other things. We list all our products on eBay as well as CaravansPlus.com.au, but we have to charge 15% extra on eBay because of all the fees. We hope that Australians will keep supporting private online shops like ours and that we do not follow the US path of all online shopping going through Amazon and eBay.

How Can I help?

Really there is not a lot the shopper can do to stop these frauds. The problem is with the systems of the big guys. One thing that I would encourage everyone to do is consider the reputation of the business you are giving your money to. Price is always important, but the more you support business with good reputations (online & offline), the more business will try and earn good reputations. That is good for everyone... except the crooks.