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The eBay Credit Card Fraud Scam

Article by Steve Smith - Caravans Plus
Read Time: 4 mins

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.

The eBay Credit Card fraud Scam
The eBay Credit Card fraud Scam

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.

eBay Triangulation Fraud
eBay Triangulation Fraud

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.

The eBay Credit Card fraud Scam The eBay Credit Card fraud Scam
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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.

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74 Comments

  • comment-avatar

    Jack

    Thank you for letting me know! Something new to learn everyday. Regards, Jack

  • comment-avatar

    Peter

    Thank you. I always shop through your website Cheers Pete

  • comment-avatar

    Raymond

    Thank you for the advice. For my part I ALWAYS only use PayPal online to try and avoid any such issues; if PayPal is not an option I refuse to buy. I know there are fees attached to this but in my opinion it is worth the extra for security.

  • comment-avatar

    Ronda j

    Hello Steve, I am absolutely stunned. The tactics some 'people' will stoop to, is just mind blowing. I must agree wholeheartedly with Raymond, if it is not through PayPal, it will not be purchased. Thank You for letting us know. Sincere & Kind Regards, Ronda

  • comment-avatar

    Rob

    I agree with Raymond and Ronda, wont by anything on line with a credit card only Pay Pal Cheers Rob

  • comment-avatar

    Rob

    Great info, thanks everyone. I use PayPal who then debit my Visa, does that create a credit card issue?

  • comment-avatar

    Ron

    Thanks for the heads up, I'll purchase directly from your online shop from now on, I do a lot of shopping on ebay but I'll be wary from now on, the last thing I want is to create an issue for any business I deal with, we're all in this together

  • comment-avatar

    Richard

    Thanks for taking the time to let us know.

  • comment-avatar

    Geoff

    Thanks for the info. I’m reluctant to use a credit card unless I know who I am dealing with otherwise, PayPal for me. Cheers

  • comment-avatar

    Keith

    Thanks for info Steve. We cannot stop the crooks but WE can make it difficult for them. We have been scammed a few times but we have NEVER lost any money. Why? Because one of us checks the bank almost every day, we have seen the unauthorised transactions sometimes within minutes of the occurring and informed the banks immediately who then cancel our cards and new one – this is not always convenient especially if you happen to be overseas when it happens. So it is really on our own hands. Blessing you all for 2021. Keith

  • comment-avatar

    Leigh

    I believe Ebay has a case to answer though they may try to get around it, in reality the are hosting a seller who is effectively selling stolen goods. They are also supposed to know who is selling on their site, ie it is very difficult to create a new account on Ebay if you have been banned so how is the seller doing this? If Ebay can't provide the name and address of the seller/s concerned then they are open platform for criminal exploitation and it is not the safe trading platform they want all to believe it is.

  • comment-avatar

    John

    I only use paypal,do not have a credit card.

  • comment-avatar

    Marion

    thanks for the info i also only use paypal never a credit card

  • comment-avatar

    Stefan

    Although eBay has denied any responsibility they have technically facilitated in the commission of an offence by allowing the offender(s) to use eBay as a site for illegal activity. As way of example Australian Banks have been severely fined for illegal money laundering which they denied, overseas transactions supporting terrorism etc etc. You have every right to report this to the accc and let them investigate. It is not up to u to do the investigation. Bring them to justice

  • comment-avatar

    Colin

    Thanks for the heads up with this problem, I almost all ways use PayPal for my Ebay purchases, all caravan related items I buy from an Australian business.

  • comment-avatar

    Ken

    Thanks for the very detailed explanation of how this scam works. They, the crooks, just never give up do they. Like some of your other clients I only buy my caravan parts and bits from Caravansplus, and I take other precautions re my banking.

  • comment-avatar

    Noel

    X2 with stefan. I use paypal for 99.5% purchases and only "lil bits" with cr card which has a $ 200 ceiling limit. Best wishes for this year Steve & team.

  • comment-avatar

    Tony

    Now I know why I do not like eBay .

  • comment-avatar

    Rod

    Thank you for this information,crooks always seem to have the upper hand, even when they are caught and bought to justice, they are laughing. PayPal is the only way to go. I hope something can be done for you eventually. Kindest regards Rod

  • comment-avatar

    Graham

    Thanks for the heads up. I don't buy your products on eBay thankfully, I prefer to buy direct from you online so I will continue to do that. Best of luck avoiding the crooks and I hope you have a fantastic 2021.

  • comment-avatar

    Ian

    Interesting scam. I am NOT a fan of eBay. try contacting them on anything and its near impossible! I always prefer to deal with the company (or their web site) directly. Similarly when booking accommodation, I ALWAYS go direct rather than on the big name booking sites (all of which are overseas multinational owned) where hidden commissions are going off-shore.

  • comment-avatar

    Charles

    Open up a shop front so that buyers can come and buy direct and/or ph you direct would save you money. Buying over the ph would also make it more personal not just a number, this why I have stopped buying from you as I prefer a personal touch and can ask questions if I which. I communicate better by mouth than text

  • comment-avatar

    Ron

    Thanks guys I always use PayPal makes me feel a little bit safer

  • comment-avatar

    Ron

    Hi again I received a 10% discount code from Ebay recently but it was only valid IF I used my credit card and not Pay Pal I thought Ebay encouraged you to use Pay Pal go figure Ron

  • comment-avatar

    Ken

    Thanks for letting us know about the scam I had no idea that this happens on eBay and others. Keep up the good work. Thanks ken

  • comment-avatar

    Don

    Thanks for that I will just go straight to your website next time and not on eBay , it’s great to support other businesses, great stuff will keep buying off you, thanks Don

  • comment-avatar

    Bob

    I have gone away from ebay over the last few years because their fees keep increasing which flows on to the customer. I can’t believe that it takes the card owner so long to notice the fraudulent transactions though, don’t people keep a check on their cards. Thanks for letting us know though, I hope you can get on top of it.

  • comment-avatar

    Kerry

    Don’t buy from a website that suddenly appears with cheaper prices.

  • comment-avatar

    Phillip

    Those f$&@ing pricks! I sell a lot of old car parts on eBay, it’s not always easy and takes time. For my old caravan parts you guys are tops and l always use PayPal. But this sort of activity really gets to you. Keep up the great work, l wish eBay would take a more responsible position and those bloody crooks will undoubtedly get theirs one day. Thanks for keeping your customers in the loop.

  • comment-avatar

    Bob

    I bought from eBay recently and the advertiser offered a 10% discount only if I paid by Credit card. I only pay by PayPal. If you have a suspect claim you can always contact PayPal. I always buy directly from your website.

  • comment-avatar

    Frank

    Thanks for the info. I hope everyone on your data base will read this. Thanks again and happy new year at CaravanPlus..

  • comment-avatar

    Barbara

    Thanks for the heads up. I pissed off FB and eBay about 12 & 24 months ago respectively. Gut feeling something was not kosher and the proverbial would hit the fan. And so it did with FB. I went there under a different name, gender and always with a VPN as I don't trust them at all. I buy direct from you, never had a problem with want I wanted and always arrived quickly and in good condition. Happy New Year and Keep safe.

  • comment-avatar

    Danielle

    Thanks for the information, we will buy direct from you website

  • comment-avatar

    Paul

    Thanks for the info. I only buy direct from Caravanplus because i know who i am dealing with. I never buy from Ebay from a company that has little feedback because of the Scams out there. Keep up the good work. Paul

  • comment-avatar

    Gordon

    Obviously the solution for people who use eBay regularly for other transactions, is to check how long a store has been registered, and their feedback rating. I make a point of only dealing with favourites, and they only become favourites if they have been a seller for 5+ years with a good history. I'm not protecting eBay as I agree, they have a lot of issues. For me I am 100% PayPal which has been owned by eBay since 2002. My only gripe with them has been the outgoing purchase charge happens in milliseconds, but takes 5 days to provide a refund. I made a complaint to the ACCC over this.

  • comment-avatar

    Dj

    Just clearing up matters, Ebay has exited PayPal in 2014, they have intertwined dispute policies, and practices, but PayPal will refer clients back to EBay's system for "normal" operations. EBay has been extricating itself further from PayPal fees by having folk list their Credit Card details with EBay using bait discounts.

  • comment-avatar

    James

    I am sorry you got ripped off Steve.You are good honest people to deal with. I hope you get some justice.

  • comment-avatar

    Narelle

    Steve - so sorry this has happened to you. I will continue to purchase directly from you and recommend CaravansPlus.

  • comment-avatar

    Jacob

    Sorry to hear. To understand: They copy your information on their shop. They copy your photos on your shop. They sell your goods on their shop. Then order from you with part fake details. Buyer gets goods unaware of scam. You loose money. My thoughts: The crooks do this on a big scale - they do not have time to read the full description. The crooks copy and paste photos. Maybe even all automated. The crooks chain is as strong as the weakest shackle. Weaken three of their shackles: 1-- Insert a text describing: To certify to you that this advertisement is correct it should be on "... ebay id ...". If not contact ebay. 2-- Watermark your images with your ebay id. 3--- insert a secret word combination that looks very normal - but is a very unique one to you - even an inconspicuous typo - do a regular / automated ebay search on this to find the crooks and take action. Good luck !

  • comment-avatar

    Gordon

    I lack the knowledge to offer any clever tech solutions but I live locally and would love to be able to buy from you by dropping into your shop. That wouldn't solve this problem but at least I wouldn't be contributing to it. Cheers

  • comment-avatar

    Frank

    Thanks for letting us all know about this scam. As a result of your info, I will now not use eBay , be more mindful of what I,m doing, buy only from your and other sellers sites , and use PayPal. As a thought, have you asked your tech people if you can change your website to avoid scammers stealing your property in this way ? The more you let the general public know about these scams the less people will use eBay. Perhaps get the ABC ,radio stations ,newspapers ,news websites Etc to highlight this scam .

  • comment-avatar

    Kerry

    Thanks for the information. I will also now avoid eBay and similar sites. Always bought direct from your site and happy with service.

  • comment-avatar

    David

    I always buy direct from your online store, thanks for that information.

  • comment-avatar

    Jonathan

    This is disgusting and I would imagine the Government would not offer any help either. Like others here I always use your website to shop and I use PayPal only and if there is no PayPal option then I do not buy. I’ve had my fingers burnt by ebay in the past and now have nothing to do with them. Jon

  • comment-avatar

    Rodney

    Thanks Steve for the scammer info Regards Rodney

  • comment-avatar

    Tony

    Thank you for letting me know. These scumbags just get worse and there appears to be no limit to the scams they come up with. I will only deal with you directly. Thank you for your service over the years.

  • comment-avatar

    Stevo

    Why don’t you attempt to contact buyer for larger value items. When you establish contact details are fake as you stated - don’t send item??.

  • comment-avatar

    Natali

    The business I work for was also hit quite badly with this triangular fraud scam a couple of years ago. The problem is not just through direct credit card payments, it is also run through PayPal. We only accepted PayPal payments, however the crook was able to pay with a credit card without registering for a PayPal account. PayPal is a great platform for the customer - gives them lots of protection, but it still has this very large loophole that leaves the Seller vulnerable. To add insult to injury, if the fraud amount is not picked up by the Seller before the funds are taken back by PayPal - they then get charged an additional $15 / transaction. So, not only is the Seller out of pocket for the product and shipping costs, but also an additional "Chargeback" fee by PayPal! With regard to contacting each customer before shipping goods - If you have a large volume of orders coming in every day, it is just not feasible to sit and ring /email each individual customer. The amount of time required is unsustainable. If you can't get them on the phone - you need to hold orders until they reply by email. This just gets very messy. Bottom line is - if there is a bunch of the same product that is selling around a certain price and there are one or two listings that are good amount cheaper, then take a closer look at the seller of that product. Reviews and how long they have been trading. Some Ebay scammers set up a bunch of accounts and let them sit for a year or so before using them. This way, when you look at when they registered - it has a nice buffer of time. So here - you look at how far back their reviews go. If there is nothing past 2 months ago, then beware! As the article says, you - the consumer - generally will not be inconvenienced. When you purchase something, PayPal / Ebay covers you because if you do not get the goods, you can claim your money back from the fraudulent seller.

  • comment-avatar

    Peter R

    After reading this, there's 4 fraudsters here. The scammers, eBay, The Banks and the person who received the goods and then gets their money back which they should be handing over for the free goods they have received. It's no wonder that Australian prices are higher, they have to cover all these losses. Tax Department will start to questions small businesses abput their claims for losses, placing more pressure and stress on their bank accounts, pushing up prices again. The thing I do when buying on eBay, is check the history of the seller, especially how long they jave been operating and complaints they have received in the past month and six months. Everyone needs to be careful. My Credit Card is protected by Falcon thru ANX but nothing is totally secure. It has help a couple of times with dodgie sites stopping transactions and bank contacting me. As an ex smaller business owner I feel for you.

  • comment-avatar

    Charles

    Good to know. I had no idea this was going on, I always deal directly with you guys,

  • comment-avatar

    Peter

    Happy New Year to you all, Thank you email me info, Yeah I have seen eBay post price high than you I order you not eBay. Peter

  • comment-avatar

    Robert

    Steve, thanks for the info. I am a regular Ebay user as buyer and seller of personal stuff (not a trader) hope this issue can be sorted for you. I will always go to your web site first for my camping and motorhome products.

  • comment-avatar

    Anita

    WOW, l had no idea this could happen. thanks for the information. l only buy through your web site.

  • comment-avatar

    Mick

    will only deal with caravans plus for parts for my motorhome.

  • comment-avatar

    Colin

    So sorry to hear that you've been so scammed :-( I think that most people think that the credit card and bank companies absorb - but it's always a loss to the poor Merchant. And as you say, it can be l-o-n-g time before credit cards get blocked. And the Merchant pays. All the best. You're such a great company and so appreciated by so mayny.

  • comment-avatar

    Bob

    I had the same problem on my website, credit card was cleared by eWAY and goods shipped in good faith, after two weeks I get email from eWAY stating there has been a fraudulent use of a credit card, and did a charge back on my account. I lost out both way shipped the goods and lost the payment, Police took another month to reply to my reported theft. Sellers be wary I sell on ebay as well no issues so far.

  • comment-avatar

    Ian

    Thanks for making your customers aware of this. Thankfully, I always buy directly from you guys instead of eBay. I wonder how many of your customers are blissfully unaware that they've received goods this way?

  • comment-avatar

    Tony

    Thanks for letting us all know, of this fraud. I can assure anyone, that if it happens to me, and my payments were returned to me, I would pass on this payment to the people, I owed. I always use PayPal, and if people do not accept it, then I do not buy

  • comment-avatar

    Tina

    Why not add to your own security? You could only send items to registered customers and send them an automated message on receiving an order and list the last 4 digits of their card or something similar?

  • comment-avatar

    Bill

    Thanks for drawing this scam to our attention but I am struggling to see how the risk in this scam ends up with you as opposed to the buyer of the goods. How can ownership pass to the buyer when you have no relationship with the the buyer? Surely the buyer either has to pay you for the goods or return them. Have I missed something?

  • comment-avatar

    Paul

    Thanks for letting us know. I am really sick of these low individuals. There have to be better ways to catch and punish them. They must have had dishonest parents!!!

  • comment-avatar

    Richard

    Interesting stuff. Disappointing to hear good honest businesses like Caravansplus are becoming victims. Surely Ebay can't sit on its hands.

  • comment-avatar

    Gary

    Thank you ,its a pity more companys do not avail this info to their customers ,so we can thwart some of these low life scumbags ,and yes the bigger the companys the less they are likely to accept liability and take responsability. Keep up the good work . I will only shop with you direct and via paypal

  • comment-avatar

    Brent

    Question. Does the use of Pay Pal completely protect from this Scam? I generally only use Pay Pal on the net.

  • comment-avatar

    Miles

    I don't imagine using PAYPAL makes any difference. PAYPAL is designed to protect the buyer but the buyer does not complain because they got what they paid for. The Scammer is effectively Drop Shipping from the supplier. The issue is the stolen credit card the the scammer uses on the supplier website. The fact that the supplier is sending the item to the scammers customer is irrelevant. It would be like me buying something from Caravansplus and getting it posted to by brother which is acceptable. That's why Ebay wont help. If you want to help the legitimate business, you have to wait to hear from them to tell you they have been scammed (they have your address). Then, as an Ebay Customer, report to Ebay that your item has not been received from the Scam Seller. Under those circumstances Ebay and Paypal will claw back the fee from the Scam Seller. If they cannot do that, under their guarantees, Ebay or Paypal will pay you back from their own pocket and write off the loss if they cant collect from the scammer. Other helpful thing to do is check the reputation of a seller. If they have 5 feedback that all they the same think and are vague, they could be fake. I rarely will deal with a seller with less than a hundred transactions and a history of positive sales.

  • comment-avatar

    Dennis

    Thanks for the article explaining the scam. I had no idea this was happening, however I always deal direct with you guys and always will be in future. Sorry you've been caught up in this scam.

  • comment-avatar

    Roy

    Thanks for the information, if only they used their IT skills for the better Is it safe to buy direct on the website not through Ebay?

  • comment-avatar

    David

    Thanks for that I always buy Australian and from Australian companies were i can

  • comment-avatar

    Richard

    Hi folks Sorry to hear you have been scammed ,this is getting worse seems to me. Being an older person makes it a bit harder for me because i am not really up with all new fangled ways of doing things. Younger family have advised me to not use my card if i am not familiar with the seller and be alert even when using Bpay. many thanks for the alert.Richard.

  • comment-avatar

    Steve

    Thanks. I won’t be using eBay as long as you guys have your own online system.

  • comment-avatar

    Patrick

    I learnt my lesson the hard way. Never use an eBay website, even though the product may be 'cheaper'. Paypal is not foolproof and you are providing them with a lot of private data when you sign up for their service. No such thing as a free app. Buy directly from the legitimate company website, nowhere else.

  • comment-avatar

    Micheal

    Your right it was a good read. Just goes tp show that if the mongrels want somthing it hard to stop them. What honest person would thing of such a low act, it beggers belief. Hope you can figure out a solution. Mic.

  • comment-avatar

    Robert

    Website orders only eBay does not give you a reliable source of parts or have a satisfactory dispute department.

  • comment-avatar

    Kevin

    So sorry to hear you were scammed. I have become very disillusioned with eBay and PayPal, having been ripped off by unscrupulous traders. Neither company wanted to know, and simply directed me to my credit caed provider to seek redress. I now tend to seek shopfront suppliers and (as in CaravansPlus) reputable on-line suppliers and use my credit card. With PayPal the bank does not want to know because so far as it is concerned the financial transaction was with PayPal and that was fine. EBay will not take action against an unscrupulous trader, because e Bay benefits from the unscrupulous trade. Thank you or the good trade I have done with you, and I look forward to mere dealings with CaravansPlus.

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