Credit Card Fraud Issue with PayPal

We have a very high level of fradulent activity against our site. We use Worldpay as our payment processor and each transaction is issued against chargeback up to GBP250. With a very tough screening policy, we have managed to keep chargebacks to less than 0.5%

We are now thinking of adding PayPal to our list of payment providers. Since we are based in Hong Kong, we are not covered by the PayPal guarantee scheme.

I am particularly worried about the possibility that the person may have opened a PayPal account with a stolen or hacked US credit card and then ordered goods to be shipped to a developing country. I am not sure whether any way that we can check on this.

I wonder if anybody has any experience with credit fraud with PayPal. Should we impose a maximum transaction amount e.g. $100 for PayPal or refuse to ship PayPal orders to certain countries?

You can refuse orders marked "unconfirmed".

Although anyone can sign up with paypal with a credit card and immediately start to make purchases up to $750.00 USD, they are marked as "unconfirmed members" until they enter a confirmation number. Paypal charges a small fee to the card at signup, a code number is added to the charge and appears on the card owners credit card statement. The card owner must later enter this code to become a "confirmed" paypal member.

This allows you some protection, only ship to "Verified" members. You can advise the unconfirmed, that they must confirm their paypal account before shipment can be made. That isn't hard in this day and age, most people can access their credit card accounts online and can immediately obtain the code required to update their paypal account to verified status.

[ Message was edited by: unreviewed 07/26/2003 06:34 am ]

Hi, thanks for your advice. We have just received an order from an unverified member with a confirmed shipping address. Please can somebody explain how this could come about. I thought that confirmed addresses can only apply to verified members.

I have never seen that happen. You should contact paypal, and post the response here, if you would be so kind.

Hi, this is the reply from Paypal:


To increase security within our community of members, PayPal denotes accounts as either 'Verified' or 'Unverified'. Verified shows a Non-U.S. member has completed the Membership Process.

Benefits of Non-U.S. Verified:

· Others will know that customers have further established their identity in the PayPal system

· The verified status will increase confidence within the PayPal community

A PayPal member can tell whether another member is Verified or Unverified when sending a payment. The recipient's status will be listed on the 'Check Payment Details' page.

If a customer has a confirmed address, that address was a U.S. address with a PayPal Account with a registered and confirmed bank account.

If you have any further questions, please feel free to contact us
again.

Don't accept paypal...its nothing but a joke. They charge you out the beehive for a service that they don't perform.

I've gotten the shaft from them several times.

Paypal is one of the biggest jokes on the internet. If you want to save yourself all the headache, just use Visa and MC.

IF your customers want the goods bad enough, tell them to send a money order, you don't need paypal customers.

From what I understand:

* Verified means the customer has entered the PIN number on their statement into the system.

* Address confirmed means the customer has done the above, or the AVS results matched.

So your transaction shows the AVS matches, but the customer has not confirmed their account (or that they have access to that credit card or bank account)