One of the more challenging issues we have to work around involves new vendors. While we do have a wealth of knowledge and experience relating to the various types of fraud, it can prove somewhat more problematic to link this knowledge with a new vendor. First, we must understand our vendor and the aspects of their business that may be at risk of fraudulent activity.

Types of customers and fraud:

With all new vendors, we must start from the ground up. From the moment our partnership begins, we attempt to assess what types of customers our vendors will be receiving. For the purpose of this study, we reviewed one of our new vendors and will now refer to them as “Supplier A“. In the case of Supplier A, several discrepancies were located in each order placed through their system. We noticed discrepancies between the billing information and the IP addresses, as well as discrepancies within our internal tools. While not unusual to find orders with these types of discrepancies, we did find that each new order placed had very similar discrepancies. This made it appear that the same person or group was attempting to circumvent the fraud review process and get by undetected. When we noticed such a large percent of Supplier A’s orders with these same discrepancies we then proceeded to take a higher level of caution with all new orders reviewed. It appeared that the trends changed slightly, receiving orders with matching billing addresses and IP addresses but suspicious email addresses as well as substantial and consistent discrepancies within our internal tools. This may have been the work of the same person or fraud ring placing the original orders, but it is also possible that the vendor was being hit by other fraudsters.

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This week is International Fraud Awareness Week. The Association of Certified Fraud Examiners (ACFE) has information and resources that can be used by anyone to combat all types of fraud.

“This weeklong campaign encourages business leaders and employees to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education.”

Share your ideas with us this week in a series of articles that will help define different types of fraud, highlight 2Checkout’s role in fighting fraud, and what we can all do to reduce the amount of fraud. By working together and communicating our ideas we can make online shopping safer for both customers and merchants.

The currency used when an order is placed will effect the type of dispute notice that 2Checkout.com receives from a credit card provider.

If the order was placed in United States currency (US Dollars):

• 2Checkout.com receives notice from the credit card provider after the dispute has been completed.
• 2Checkout.com sends notification to the vendor of the chargeback and the reason for said dispute.
• The vendor has the option to either let the dispute stand, contact the customer to resolve the dispute, or contact 2Checkout.com for assistance with challenging the dispute. If a vendor would like to challenge the dispute they need to contact 2Checkout.com’s Dispute Department within 10 days of receiving the notification.

If the order was placed using any currency other than US Dollars:

• 2Checkout.com receives notification from the credit card provider that an account holder has initiated a dispute.
• 2Checkout.com sends notification to the vendor that a charge is currently being disputed.
• The vendor has the option to either let the dispute stand, contact the customer to resolve the dispute, or contact 2Checkout.com for assistance with challenging the dispute. If a vendor would like to challenge the dispute they need to contact 2Checkout.com’s Dispute Department within 7 days of receiving the notification.
• Once a non-US Dollar dispute has been completed, neither 2Checkout nor the vendor can challenge the dispute.

Additionally, 2Checkout.com occasionally receives notification from the credit card provider that the account holder is inquiring about a charge. On behalf of our vendors 2Checkout.com will send a copy of the receipt to the credit card provider. 2Checkout.com will also inform the vendor of the inquiry to give them the opportunity to contact the customer to resolve any possible issues that could result in a chargeback.

If there are any questions about the dispute process, please contact the Dispute Department by email at chargeback@2CO.com or by using the contact information provided here.

2Checkout.com strives to provide vendors with detailed stat tracking to assist in monitoring the financial history of their accounts.

A key aspect of this information is active tracking of refund and bank dispute amounts and percentages. These percentages play a key role in 2Checkout account evaluations, as well as determining the level of the rolling reserve that is applied to accounts.

2Checkout maintains the following criteria for acceptable refund and bank dispute percentages:

• Refund amounts should not exceed our acceptable limit of 10%.
• Bank Assisted dispute levels should not exceed our acceptable limit of 1%.

Percentages above these levels may lead to reserve increases, and can be detrimental to the overall profitability of your company.

Refunds and Bank Assisted Disputes that are deemed fraud related are weighted differently than those issued for service related issues, yet these stats should be monitored as well.

2Checkout encourages all vendors stay current on their account statistics and are proactive in using these tools to ensure the overall health and good standing of their accounts.

Credit card providers charge a fee for every chargeback that is received. If the disputed is issued for a fraud related reason, the fee is not passed on to vendor. However, if the dispute is issued for a service related reason, the fee is passed on the the vendor. The fee amount will vary depending on the amount of chargebacks that take place within the vendor’s account. For further information please read the Operating Regulations Fee Structure.

There will be a $50.00 USD fee for receiving a fraud related chargeback for any order that a vendor requests to be reinstated after it was failed by 2Checkout.com’s fraud department.

If a vendor would like to challenge a chargeback all documentation must be sent to 2Checkout.com’s Dispute Department for review. If 2Checkout.com decides there is a solid case to present to the credit card provider, the vendor will have the option to challenge that chargeback. The credit card provider charges a fee for challenging a dispute; this fee is passed on to the vendor and is non refundable. The fee to challenge a dispute is $15.00 USD.