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How can they have this level of fraud with a physical product that has to be shipped somewhere?

by celticninja 11y ago

zoidb 11y ago
My assumption here is that it is cost prohibitive to go after individuals so the loss is just written off.
- celticninja 11y ago
  cost prohibitive? Some of the losses in in the hundred of thousands, almost millions of dollars. Sure it might not be worth Stripe or the Credit Card companies going after the fraudsters because they get the merchant to pay. But for IO Hawk to just leave it and not follow up seems like business suicide. Even if they did it just to tighten up procedures in future to prevent future fraud it would be worthwhile. Perhaps they were all posted to reshippers, then you would ban reshippers from being the delivery address, or you make suspect requests wait longer for delivery, not even formally telling them, just adding in a 30 day shipping delay or soemthing.
jthnme 11y ago
Tricky part that nowadays you tend to optimize your business.. so if i would host e-store, stock all my things in fulfillment center, and automate it all. I would be left with empty warehouse, and negative balance in the stripe account... also - In stripe - if you refund and mark payment as fraudulent there are no fees. If someone disputes payment later on - there is a fee.. so.. as long as you are honest.. no extra fees occur.
URSpider94 11y ago
They mention that in at least one case, most of the fraudulent purchases came from a single IP. Whomever it is has arranged a place to drop-ship the boards that will be untraceable. Perhaps they use addresses of unoccupied homes, then just pick up the packages from the doorstep. I know in the past, criminals have used fraudulent accounts at local mailbox rental stores, which they rent for a month and then dump. Point is, there are plenty of ways to launder shipments, if you are doing it with a plan and at scale.
- celticninja 11y ago
  I get that, but multiple orders to the same address from the same IP should surely be raising some flags somewhere.

How can they have this level of fraud with a physical product that has to be shipped somewhere?

zoidb 11y ago

My assumption here is that it is cost prohibitive to go after individuals so the loss is just written off.

celticninja 11y ago
cost prohibitive? Some of the losses in in the hundred of thousands, almost millions of dollars. Sure it might not be worth Stripe or the Credit Card companies going after the fraudsters because they get the merchant to pay. But for IO Hawk to just leave it and not follow up seems like business suicide. Even if they did it just to tighten up procedures in future to prevent future fraud it would be worthwhile. Perhaps they were all posted to reshippers, then you would ban reshippers from being the delivery address, or you make suspect requests wait longer for delivery, not even formally telling them, just adding in a 30 day shipping delay or soemthing.

jthnme 11y ago

Tricky part that nowadays you tend to optimize your business.. so if i would host e-store, stock all my things in fulfillment center, and automate it all. I would be left with empty warehouse, and negative balance in the stripe account... also - In stripe - if you refund and mark payment as fraudulent there are no fees. If someone disputes payment later on - there is a fee.. so.. as long as you are honest.. no extra fees occur.

URSpider94 11y ago

They mention that in at least one case, most of the fraudulent purchases came from a single IP. Whomever it is has arranged a place to drop-ship the boards that will be untraceable. Perhaps they use addresses of unoccupied homes, then just pick up the packages from the doorstep. I know in the past, criminals have used fraudulent accounts at local mailbox rental stores, which they rent for a month and then dump. Point is, there are plenty of ways to launder shipments, if you are doing it with a plan and at scale.

celticninja 11y ago
I get that, but multiple orders to the same address from the same IP should surely be raising some flags somewhere.