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.