Fraudulent Credit Card Purchases


Via telephone, email or internet order form, unauthorized purchases are made by credit card and the transportation company will be contacted to pick up, or to receive and transport the cargo. The initial transport is often FedEx or UPS but it can be any provider including courier or postal service   In some cases the goods are first delivered to a warehouse, storage facility, parcel store or some other business or residence and then the transporter is contacted and requested to pick up goods from that address and to ship them to another address/party.

Upon reviewing a monthly statement or receiving an electronic notice (Paypal does this for its Debit Card account holders) or a telephone call from their banker who has noticed a purchase not consistent with usual purchasing pattern goods or location, the cardholder can dispute the charges to the card issuer who then institutes a "charge-back" procedure against the credit card acceptance account/provider of the seller.

Paypal is a merchant/seller credit card acceptance, service provider with a policy that unless the goods as ordered, were shipped to the cardholders billing address of record the cardholders account will be credited and the merchant/seller have to pay back any funds they received from the credit card company - a "charge-back".   

Sellers/merchants can protect themselves from this sort of fraud, at the point of sale, by requiring that the purchaser provide them with a photo or scan of both the front and back of the credit card and the front and back of the photo ID.  Paypal and other merchant credit card acceptance services will provide their merchant  sellers with an instant report as to the billing address of record of the true card holder and whether or not the transaction is guaranteed or assured against a fraud.  

The other method of verifying this is for the seller to contact the toll free number on the back of the card.

Many sellers are using their credit card terminals manually and entering credit card numbers as though the customer were in front of them and swiping the card, rather than entering full name, billing address and phone number as required for "virtual terminal" - when the transaction is being conducted over the internet or telephone because the purchaser is not physically present with the card.   Initially the transaction will be approved but if and when the true card holder objects the merchant is out the payment and out the product they shipped.