Mitigating risk as a seller: How to spot unusual buyer activity.

Jun 09 2020 | PayPal editorial staff

Fraud can cost a business time and money - that’s why it pays to be vigilant of unusual account activity, where fraud could be lurking. Here are some telltale signs of unusual buyer activity that may suggest fraudulent intent. If you see any of the 13 indicators below, you may need to take a closer look.
And if you haven’t already, make sure to look at the six best practices to help prevent fraudulent payments from even taking place.
 
1. Shipping Address is in a high-risk country or location that’s known for fraud.
Are you seeing an abnormal number of payments from an unusual or unexpected location?  While cross-border commerce is growing rapidly and there are benefits to accessing a global market some countries have gained a reputation for fraud. Payments from these countries may require closer scrutiny.
 
2. An order is larger than normal.
Be cautious if you receive an order from a new customer that’s larger than your average order size, especially if it’s for a product that’s in high demand, such as electronics.


3. You receive an unusually large number of orders during an unusual time of day.
For example, you receive 10 orders from U.S.-based customers, all around 3 a.m. on the same day.
 
4. You receive an unusually large number of international orders within a short period of time.
For example, you receive over 50 orders from customers outside the U.S. within a few days, when you normally receive only two international orders within a month.

 
5. An order consists of multiple requests for the same item.
For example, a customer orders 50 pairs of the same shoe in various sizes. Ask yourself if it makes sense for a customer to order several of the same product.

6. Several orders from different customers are shipped to the same address.
Fraudsters often steal credit cards from multiple people and ship the orders to a single address. 


7. The billing and shipping address don’t match.
Just because a customer ships the order to another address, it doesn’t automatically indicate fraud, but a legitimate customer is more likely to ship orders to their billing address. Look at all the order details to see if anything else appears unusual.
 
8. A customer asks you to change the shipping address after the order has been paid for.
Make sure their address change makes sense. Fraudsters originally enter valid addresses so your fraud systems don’t catch them. Then, they contact you to change the address. Also keep in mind that if you decide to ship to another address, the purchase will no longer qualify for
 PayPal Seller Protection.
 
9. You receive multiple credit cards for the same order.
Be cautious if the customer provides you with several different credit card numbers. The cards can be in the same name or different names. The fraudster may ask you to split up or create multiple transactions using the various cards. If you don’t already collect the credit card customer’s name, start requesting this information to help detect fraud.
 
10. A customer asks for rush or overnight shipping.
Fraudsters like to receive merchandise quickly, regardless of the cost.

 
11. The email address looks suspicious.
Look for email addresses that seem unusual, like knh$$yro123456@gmail.com, or undeliverable emails. Legitimate customers are more likely to use email addresses that contain their name.
 

12. A customer overpays you. 
If someone overpays you, don’t send the extra money back through a wire transfer, online banking transfer, or a pre-loaded money card. Overpayment 
scams are common. Instead, return the money through PayPal.

13. The shipping address looks suspicious. 
Before shipping an expensive order, make sure you know where the order is being shipped. Criminals may ship orders to freight forwarders, shipping companies, P.O. boxes, or vacant properties so they can remain anonymous.
 

For more information on protecting your business, you can also review these six steps to help prevent fraudulent payments.
 

The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

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Frequently asked questions.

You can use Visa, MasterCard, Discover, or American Express cards that have a registered billing address to make PayPal payments.

Another fast and easy option is paying with your bank account. Many PayPal members choose to pay with their bank accounts because it’s a convenient way to keep their spending under control.

However you choose to pay, we’ll send you a receipt every time a payment is made from your account so that you can keep track of your transactions. And we look out for you. We’ll let you know if we notice any unusual account activity.

If you are getting an error message when trying to transfer money to your bank, it could be because: If the transfer to your bank account still doesn’t go through, try:



PayPal lets you quickly and securely send and receive money for goods, services and more.

With PayPal you can:

  • Shop online in more than 200 countries and regions.
  • Send money securely to friends and family around the world.
  • Checkout quickly at hundreds of your favorite online stores.
  • Accept credit cards on your website.
  • Make donations to your favorite charity.
  • Set up an online shop and receive payments.
  • Use your credit card and earn rewards.

At PayPal, your financial security is our highest priority. We use the latest anti-fraud technology to help make sure your transactions are safer and you’re 100% protected against unauthorized payments sent from your account.

Offers that sound too good to be true, probably are
Most of us are careful if a stranger approaches on the street and offers a deal that's just too good to be true. But we're much less cautious online, putting us at risk.

Advance fee fraud
If you get an offer for free money, there's probably a catch. Typically, fraudsters will ask you to send some smaller amount (for taxes, for legal documents, etc.) before they can send you the millions you’re promised, but which they never intend to send you.

How to avoid this scam: Don't wire money to someone you don't know.

Overpayment scam
  • A customer sends a PayPal payment that is more than the purchase price of the order, and then asks you to wire them the difference.
    • They may tell you that they accidentally overpaid you, the extra money is for the shipping costs, they're giving you a bonus for your great service or the money is for the stress they've caused you.
    • They may even ask you to wire the shipping fees to their shipper.
  • This scammer may have paid with a stolen credit card, bank account number or checking account.
    • Just because a payment has been deposited into your account, doesn't mean the money is yours to keep. If the legitimate account holder reports unauthorized activity, the money can be withdrawn from your account.
    • If that happens, you'll lose the money you wired to the fraudster, the product you shipped, shipping costs and your payment.
How to avoid this scam:
  • Don't wire money to someone you don't know. A legitimate buyer won't overpay you for an order.
  • If a customer overpays you and asks you to wire them the difference, consider canceling the order—it's very likely to be fraudulent.
  • Don't wire money to the bogus shipping company—it's part of their scam to get your money.

Prize winnings
Messages asking you to pay a small handling fee to collect some fabulous prize are usually a scam. You send the handling fee and get nothing in return.

How to avoid this scam: Don't send money to someone you don't know. A legitimate prize won’t require you to pay in order to receive it.

High profit – no risk investments
These types of investments are usually scams and include messages insisting that you “Act Now!” for a great deal.

How to avoid this scam: Discontinue communication with this person/company.

Fake charities
Scammers use disasters to trick kind-hearted people into donating to fake charities. This usually happens when there is a refugee crisis, a terrorist attack or a natural disaster (like an earthquake, flooding or famine).

How to avoid this scam:
Thoroughly check the background of any charity to make sure your donation goes to real victims. Use resources to check out charities, like the ones below:

http://www.charitynavigator.org
http://www.bbb.org/us/charity
http://www.charitywatch.org

If a charity does not have a website, be cautious.

To learn more about common scams and how to avoid them, search online for advance fee fraud. You can also read the FBI's material on common types of scams. Most importantly: be as cautious online as you would be in the real world.

Shipping Scams
There are several ways fraudsters incorporate shipping into their schemes. Be sure you’re familiar with the following:
  • My shipping service scam
    • The buyer asks you to use their shipping account because they can get a discount, they have a preferred vendor they’ve worked with for years, or their shipping service is cheaper or more reliable. In another variation of the scam, the buyer may also ask you to wire the shipping fees to their preferred shipper.
    • If you use the buyer's shipping account, they can easily contact the shipping company and reroute the order to another address.
      • The buyer can then open up a complaint asking for a refund because they didn't receive their order.
      • You aren't able to prove that the buyer received their order and you are out your product, the shipping costs and your money.
    • If they ask you to wire the money to a bogus shipping company, they can steal your money.
      • After you have wired the money you’ll find out that the order was made with a stolen card or bank account. You may be held liable for returning the funds to the legitimate customer whose account was stolen.
How to avoid this scam:
  • Only use your shipping account.
  • Never wire money to someone you don't know – you can't get it back easily.
  • If a customer asks you to use their shipping service, review their order for fraud carefully. They may have used a stolen card or bank account to fund the purchase.
  • Ship to the address on the Transaction Details page.
Pre-paid shipping label scam
  • You receive an order from a customer who asks you to use their pre-paid label to cover the shipping charges. (They may tell you that they can get their labels at a discounted price.)
  • By providing the label, the customer controls the destination of the package. They may send it to another country, a PO Box or some other untraceable location.
    • To be covered under PayPal's Seller Protection policy, you are required to ship to the address on the Transaction Details page.
    • The shipping label may also have been purchased with a stolen credit card.
How to avoid this scam:
  • If the customer asks you to use their pre-paid label, review their order for fraud carefully. They may have used a stolen card to make the purchase.
  • Do not accept shipping labels from your customers.
  • Ship to the address on the Transaction Details page.
Package rerouting scam
The buyer reroutes the package so they can file a complaint that they never received it.
  • A buyer places an order and provides an incorrect or fake shipping address.
  • The shipping company tries to deliver the package but isn't able to.
  • The buyer monitors the online tracking information and notices that the shipper couldn't deliver the package.
  • The buyer contacts your shipping company and asks them to send the package to their correct address. The shipping company delivers the package to the new location.
  • Buyer then files a complaint for not receiving the item.
    • Because the shipment was rerouted, you can't prove the item was delivered to the address on the Transaction Details page.
    • The buyer gets to keep the item and money.
    • Because the package wasn't delivered to the address on the Transaction Details page, you aren't covered by Seller Protection.
    • Unfortunately, you lost the product, shipping fees and the money.
    • To make it worse, you might also have to pay your shipper an additional rerouting fee.
How to avoid this scam:
  • Contact your shipping company and block buyers from rerouting packages.
  • Validate the buyer's address before shipping.
  • Only ship to the address on the Transaction Details page.

Business / job opportunities
Fraudsters will post fake job opportunities on job-posting sites, dating sites, and via spam email.

Reshipping packages scam
  • One of the more popular work-from-home scams is reshipping electronics, clothing and other items out of the United States.
  • You receive items (electronics, jewelry, clothing, etc.) in the mail and are asked to ship them out of the country.
    • Packages may be addressed to someone else's name (the stolen credit card victim).
    • Your "employer" provides you with a shipping label (also paid for with a stolen credit card).
    • Your "employer" ask you for personal information, such as Social Security Number and bank account details, so they can "direct deposit" your check.
    • Generally, you’ll never get paid and have just exposed yourself to fraud.
  • Most merchants will not ship items out of the country.
    • Fraudsters need you to act as an intermediary to help get the goods out of the country. It also helps them avoid getting caught.
    • They use your personal information to steal your identity or takeover your account.
How to avoid this scam:
  • If it's too good to be true, it probably is. Know who you are dealing with and don't reship packages.
  • If you didn't realize you were involved in a scam until the packages started arriving, refuse delivery or return to sender. Report scams to the Internet Crime Complaint Center or contact your Postmaster.
  • Never give your private personal or financial information to anyone you don't know.
Employment scam
  • Someone contacts you about a great new business opportunity. They need an employee or partner to sell cameras (or some other expensive product) for them.
  • Scammers trick innocent and trustworthy people into sending them money and merchandise.
    • The scammer may even say they found you through eBay's Trading Assistant program. They will ask you to:
  • List some products for sale on eBay or on your website.
  • Use the money from the orders to pay their supplier. They’ll contact the supplier in advance to let them know you’ll be sending them money.
  • Update your PayPal account address to their address. They’ll usually give you an address that looks like a regular address but it's a P.O. Box.
  • After you pay the supplier, you’ll start receiving complaints from your buyers stating that they didn't receive their merchandise. Instead they received an empty box (from the scammer).
  • You contact the supplier. They inform you that your partner said you would be sending money for gold bouillons, so they shipped the gold bouillons (not cameras) to your PayPal account address. You remember that your partner asked you to change your PayPal account address to their address, so they could pickup the gold.
    • You paid the supplier for the cameras, so you file a complaint against the supplier. Unfortunately, you learn that you may be liable for the money since the supplier delivered the merchandise to your PayPal account address.
How to avoid this scam:
  • If it's too good to be true, it probably is. Know who you are dealing with.
  • Don't list someone else's address on your PayPal account.
  • Verify your suppliers and don't send money to someone you don't know.
  • Only ship items to the address on the Transaction Details page.
  • Be on alert if you’re asked to ship a lot of packages overseas or to the same post office box.
If you think you’ve received a suspicious email or have been directed to a fake website, forward it to spoof@paypal.com and we’ll investigate it for you. After you send us the email, delete it from your inbox. If you clicked on any links or downloaded any attachments within the suspicious email or website, log into your account and view your transactions. It’s also a good idea to change your password.
 
To report SPAM SMS messages, forward them to ‘7726’ (which is the keys for SPAM on most phones). Check with your service provider to find if this service is supported or read more here: http://www.gsma.com/aboutus/.  
 
To view all transactions and activity, log in to your PayPal account and check your recent activity. If you see any unauthorized transactions, go to the Resolution Center to report it.

Here's a video on identifying suspicious mails:
 

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