What do you do about known payment fraud?


As someone that's sold services and webapp subscriptions online for about 8 years now, I've seen a lot of payment fraud, mostly in the form of signing up with stolen credit card numbers. I've managed to manage the fraud with risk scoring systems, automated calls to customers during checkout, etc. so that I stay under a 1% chargeback rate.

What I'm wondering is what other startups do about the payment fraud they detect. Do you ever report it to the police? Your police, or if you have a pretty good idea of the identity of a scammer, to their local police? To the FBI? What about Visa and MasterCard themselves? Do any of them actually care?

Ecommerce Payments Fraud Money

asked Feb 6 '12 at 01:25
Dan Grossman
303 points

1 Answer


I think you should report this to the actual person if it's possible if not then report it to the bank issuing the card if you know what bank it is. Their security departments would be very interested in this. If not then to Visa or MasterCard.

One thing that I would keep is the record of this transaction as this might be needed for evidence later.

Actually I've just checked Visa's website and found this link

answered Feb 6 '12 at 02:48
1,779 points
  • I don't know of a way to report this type of thing to Visa or MasterCard. I looked around Visa's website and all I could find is "contact your merchant account provider" -- and they definitely have no interest in taking fraud reports. All my MAP cares about is extracting fees from its customers while minimizing contact of any kind. – Dan Grossman 12 years ago
  • Just added information on fraud reporting from Visa – Karlson 12 years ago
  • Right... "contact your acquirer"... who have no incentive to care about payment fraud. It doesn't hurt them. – Dan Grossman 12 years ago
  • @DanGrossman And down the list we go. :) The best people to contact in case of possible fraud is actually the issuer bank. Mine actually does monitoring and proactively verifies possession of the card. – Karlson 12 years ago

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Ecommerce Payments Fraud Money