Posts Tagged ‘credit card’

Gwyn Headley

by Gwyn Headley

Managing Director

… and Pennsylvania, and Indonesia …

Once upon a time (early this morning, actually) there was a photographer who came across a lovely website called fotoLibra.

“Gosh,” he thought. “If I sign up I can upload my pictures to fotoLibra and if they sell I’ll make some money.” So he uploaded two pictures for nothing.

This very same morning a nice lady in New York found the same lovely website.

“Gee willikins,” she thought. “I’ll sign up, and what I’d like to do tonight is buy a photograph of some guitar strings, for 5000 corporate CDs in Europe.”

Within minutes another nice lady in Pennsylvania also discovered fotoLibra and signed up. “Now, let me see,” she mused, “I think tonight I’ll have a photo of some guitar strings on my commercial internet site for a year. Ah! Here we are! The very thing!”

And both ladies, by fortunate happenstance, had hit upon the same photograph, uploaded by our lucky new member in Indonesia only moments before.

What joy! Two satisfied customers and one happy photographer! And they all signed up within 30 minutes of each other! The picture was uploaded and sold twice before it had been online for half an hour. Job done by fotoLibra!

But then, far away on the other side of the world, a new day dawned, and deep in her feculent pit the great JACQUI NORMAN stirred. She pointed one terrible eye at the computer screen and in an instant spotted the improbability of such transactions.

“FF RR AA  UU DD !!” she bellowed slowly and heavily, shaking the sere and devastated land around her lair.

As I write, there is no happy ending. The money — a fair amount, paid by credit card — will be deposited in the fotoLibra account by close of play tomorrow. In 30 days we have to pay the photographer.

And in four or five months HSBC will slowly realise there has been a fraudulent transaction and will remove the entire amount from our account without informing us first.

So maybe we won’t be paying this gentleman from Indonesia in 30 days. We’ll just hold on to the money for a little while, and see what happens.

We could be wrong.

But we don’t think so.

Credit Card Scam

January 31st, 2012
Gwyn Headley

by Gwyn Headley

Managing Director

The perceived risk of buying and selling using a credit card on the internet was the biggest single barrier to the growth of the World Wide Web.

In the eighteen years since I launched my first web site, that fear has largely been allayed. Internet users who now won’t buy with credit cards are a tiny minority. If your card is compromised in any way, the banks and card companies will refund your money and issue a new card.

But what protection is there for the merchants? The punter must be recompensed — but the financial organisations aren’t going to be the ones who lose. Someone has to pay. It’s going to be the merchants.

Here’s the Dramatis Personae of our little play:

  • Innocent Punter
  • Evil Fraudster
  • Innocent Merchant
  • Innocent Photographers
  • Innocent Credit Card Company
  • Innocent Bank

This is what happened to us. On Nov 17 Evil Fraudster used Innocent Punter’s credit card details to buy six images — over $800 worth — from us, the Innocent Merchant, and download them to Innocent Punter’s apparent email address.

On Nov 25 Innocent Punter signed an affidavit to say his card had been used in a fraudulent transaction, i.e. the purchase of $800 worth of images from fotoLibra. Innocent Merchant isn’t told of this, either by the bank or the credit card company. All we know is that $800 has been paid into our account and the images have been downloaded.

The $800 payment appears on our next bank statement. Christmas intervenes, and we make all the payments to our photographers on Jan 21. The $800 payment is still visible in our bank statements.

This morning, Jan 31, we receive a letter through the post from the bank telling us there has been a fraudulent transaction involving a credit card payment on Nov 17 and they are removing the $800 to pay for it. So the status quo of the Dramatis Personae is now as follows:

  • Innocent Punter — unscathed
  • Evil Fraudster — 6 digital images the richer
  • Innocent Merchant – $800 poorer
  • Innocent Photographers – $400 richer
  • Innocent Credit Card Company – unscathed
  • Innocent Bank – unscathed

My questions are

  1. Who benefits from this fraud? Evil Fraudster gets 6 images (which haven’t been used as far as we can tell). Innocent Photographers get $400. Assuming the photographers aren’t linked to Evil Fraudster, they’re doing better than he is.
  2. We pay the credit card companies substantial annual fees for the privilege of using their service. If they authorise a payment, we have to take their word for it. We cannot check every individual credit card transaction ourselves — that’s what we pay them to do.
  3. So why is Innocent Merchant the only loser in this scenario? If the bank and the card company says ‘Here’s the money — spend it wisely’, how come they can snatch it back nearly three months after they’ve given it to us?
  4. Most importantly, if the fraudulent transaction was reported on Nov 25, why weren’t we informed till Jan 31? That is OUTRAGEOUS.

Damien our IT guru has traced the route the transaction has taken. Unsurprisingly it trails back to those bastard Nigerians again. They’re not doing their country any favours at all. Could anyone ever trust a Nigerian nowadays?

Obviously the villain of the piece is the rogue Nigerian, but I fail to see how he can benefit from the scam. Can anyone enlighten me?

The end result is that we’ll just have to wait longer paying photographers after making a credit card sale from someone we haven’t dealt with before. 99% of credit card sales made through fotoLibra are perfectly legit. In fact, this is only the second one that’s gone wrong. The first one was such a blatant blag that even I could see through it — someone in Brazil signed up as a photographer and uploaded 4 photographs. The following day someone else from Brazil signed up as a buyer and bought the four images for £2,000. We then should have paid the Brazilian photographer £1,000. But we had our suspicions. We waited. And the bank claimed back the money after three months. We were not compensated.

But I cannot figure this scam out.

Curious

July 1st, 2010

Man joins fotoLibra as a Seller at 12:45 and uploads four photographs.

Another man in another country on another continent joins fotoLibra as a Buyer at 17:15 and immediately buys one of the new seller’s photographs for £140, paying by credit card.

Why am I suspicious?

Nobody has joined and made such a quick sale as this since last year, when a Brazilian signed up and uploaded five photographs, all of which were bought within two hours for comfortably large sums of money by another Brazilian who had just signed up the same day. He too paid by credit card. 89 days later the bank snatched back the money, all of it.

Have I the right to be suspicious?

Last week my credit card was refused (I was trying to buy several litres of Pimms). We contacted the card issuers and found a payment of £10 had been made a couple of days earlier to Oxfam. Not by me it hadn’t been. This was followed up by an attempt to pay a large Southern Electricity bill with the card, which had been rejected. We don’t have Southern Electricity. So the credit card was compromised — how? — and quickly cancelled. A replacement arrived yesterday.

If this transaction turns out to be fraudulent, we stand to lose £70. It’s not a huge amount of money, though God knows we could all do with it. If they are fraudsters — and how can I tell? — they’d have to do it many times over to make a living out of it.