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Last week I became the unwitting victim of the latest Internet scam.
I own and operate 3 affiliate programs and as such am used to receiving and
filing order confirmation emails all day long. I was noticing a recently
registered affiliate (overseas) for EZineMoney.net was really racking up the
sales.
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Much to my delight, I emailed to congratulate him on his success. Next day,
four chargebacks in the mail, all attributable to his sales/reseller site. Two
cards, both charged twice with different Order Names. Then, the phone started
ringing with other people who did NOT order my ebook that had EZineMoney.net
charges on their credit card statements.
Now, what I *should* have noticed with each/most of these orders was the
following:
- Order Name and Name on Card were different.
- Email addresses of customers were *strange* and often similar in nature ie:
fmam@famfdma.net, fasdm@fmasdfm.com, mfa@mfdamfai.com, or, this: juansmithjtiti@yajhin.com.
Of course, these don't exist.
- None of these *customers* bothered to register for the reseller program
after ordering. About 75% of real customers do.
When the fraud hit the fan, I called a well-known competitor for his advice,
and I wasn't two sentences into my explanation when he stated in no uncertain
terms - fraud! He then told me to watch out for an email from this guy
"almost begging" for his commissions check. No more than half an hour
later, that *desperate* email graced my inbox! See, this astute marketer had
been hit with this scheme recently.
Now, what makes this all the more ludicrous, is this thieving reseller was
using stolen credit card information JUST to receive his commissions a month or
more later! I mean, how low-percentage can you get?
Oh silly me, here I was congratulating an active reseller and he must have
been laughing his lyin' derriere off at my naivety! However, last laugh was on
him, as his site was deleted, and, his HUGE commission check NOT written! Not
surprisingly, when I informed him of the deletion of his site and the
withholding of his commissions, he had the parts to reply with the following:
"all i can say that is not unfair and i will see a way to get my rights
and my money. Best regards".
Double negative aside," Best regards" my butt!
The story gets worse though. Shortly after undertaking a lengthy audit of
orders, I came across my good friends friend, who registered under him of
course, and voila!, a ton of fraudulent orders there. Migraine-bound at this
point, I discover a third and fourth participant!
When all is screamed and done, a LOT of innocent people had their credit
cards charged in my name (they will all be refunded of course) and my bank
account is going to be reduced by an amount that would make most people's teeth
rattle! There will be endless hours of refunding these innocent cardholders and
adjusting applicable commissions (a notable affiliate program directory is the
innocent sponsor of the first culprit). Plus, of course, my merchant account is
in jeopardy due to the sheer volume of fraudulent orders and chargebacks.
Valuable lessons learned here folks. I'm quite sure I will be able to add to
this list once I'm all the way through this dilemma, however, I felt it best to
let you in on some good advice right now:
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1. Thoroughly check each credit card order you receive.
If you see
irregularities as per what I've listed above, refund the card right away before
they batch. The email address will most likely be fake and you will not be able
to reach the customer by email.
2. You *may* want to consider blocking out some countries from your
program.
Many third world countries are infamous for credit card fraud. In this case, the
cards were all domestic but the resellers were from Europe and Asia.
3. If you use Authorize.net you may want to check out their new
FraudScreen.net service. If you use another gateway, check to see what fraud
prevention services they have in place.
4. If you detect fraudulent orders, contact your merchant account provider
right away. They should be willing to work WITH you on the problem. Remember,
you will have a certain *allowance* in terms of chargebacks/refunds and you may
stand to lose your account if you reach or exceed that threshold.
5. Lend a sympathetic ear to those victims whose cards were charged
fraudulently. Some, as in my case, will be understandably angry and although
that anger should be directed at the thieves, they may lash out at you. Act on
their refunds immediately!
6. Once you are *sure* a reseller is using this scheme, delete them instantly
but make sure to *Save* all their registration and commission data before you do
so. These documents may be required in future investigations. I informed each
reseller with this notice:
"We have terminated your website and are withholding commission payment
pending investigation of the fraudulent orders emanating from your website.
Authorities in all countries involved have been given complete
documentation."
This way, in the slight event they are innocent (my guys certainly weren't),
you haven't technically accused them. You might want to contact your attorney
before officially notifying them.
It's almost inconceivable to me that even the most desperate thief would
resort to buying (or hacking) stolen credit card information only to use it in
such a way as to expect a financial reward 1-2 months later when there is a
better-than-average chance they will be caught, not paid at all and reported to
applicable authorities. These morons did however, cause me great grief, which has
only just started, and which you can probably avoid altogether.
Just as I was putting the finishing touches on this article, I received an
email from a friend and fellow affiliate program manager who was concerned about
fraudulent orders and guess what? She had the same thieving resellers as I had!
Considering that this appears to be a growing problem, it is my hope that you
will take my advice to heart before you become a victim of The Latest,
Not-so-Greatest dotCon Game!
About the Author:
Rick is the highly acclaimed author of the new, top-selling eBook, Branding
YOU and Breaking the Bank. Spend what he guarantees will be the most important few minutes you'll spend
on the Internet and Start Branding YOU and Breaking the Bank: http://www.brandingyourself.com
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