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What you do to prevent fraud?

Discussion in 'Resource and Add-on Discussions' started by meSingh, Mar 7, 2013.

  1. meSingh

    meSingh Active Member

    I recently got a client who used paypal dispute system to do get a copy of my theme for free. I have after that switched my 3rd party system to a better one that charges a bit more but makes these things a bit more secure.

    I want to know what you guys to do prevent these type of frauds and what system or custom built solution you use?
  2. Digital Doctor

    Digital Doctor Well-Known Member

    That's terrible :(
    Must be frustrating.
    was it this issue ?
  3. John L.

    John L. Well-Known Member

    We use WHMCS and their licensing addon for our products. When ordering we also have a fraud detection system which blocks orders from high risk countries and free emails. So it has quite a bit of protection, but it's tough for style creators to license their work since it's simply HTML and CSS (which source code is easily accessible).

    I'd recommend the software to anyone even though it's primarily a billing software for web hosting providers. Over the years it's widened the target audience to software developers as well. Not so much designers :p.

    *Note: You're not always going to stop fraud and people taking your creative works. However you can slow them down a bit by using software like that.
  4. meSingh

    meSingh Active Member

    It was the same thing but i don`t think he was from that country.

    Yes, i know about WHMCS and it is really a good software. Its just that its too expensive for selling a cheap theme. I have not got those many sales to even cover the the WHMCS itself :p
    Digital Doctor likes this.
  5. Andy.N

    Andy.N Well-Known Member

    I avoid using Paypal as much as I can. I have a real merchant account and can accept credit card directly from anyone. This will prevent people from abuse the dispute system like in Paypal.
    If you are any real business, you should look into a merchant account.
  6. Brandon Sheley

    Brandon Sheley Well-Known Member

    Just an FYI, in my experience a credit card is even easier for the user to do a chargeback.
    Russ likes this.
  7. Andy.N

    Andy.N Well-Known Member

    I got zero charge back and I have my merchant account up for 2 years and process 0.5M in revenue.
    To charge back, they will have to contact the CC who will contact me. In most cases, the CC will eat that cost as part of their business expense/loss.

    It helps that I have a refund policy that provide 100% refund within 14 days. And I sell services, not software or digital products.
    Maybe fraud is a bigger problem for some product/sectors than others?
    Russ likes this.
  8. Kim

    Kim Well-Known Member

    Fraud is a big problem in the theme world.

    I haven't had a chargeback for years by doing a few things...

    Reject sales from certain countries without exception.

    Must be a live real site, if that is not provided as asked on our Order form, the order is rejected.

    Paypal account must be genuine verified (this is better now than it used to be years ago).

    Name must match with Paypal account - IP must reflect the Paypal address.. ie: IP puts the buyer in country X but Paypal has them as a resident of country Y (good chance it is a cracked Paypal account and will chargeback when the owner realises)

    Ask Questions - send the purchaser a PM asking a few questions -

    Look for obvious clues - anyone in a hurry is automatically flagged as being a little suspect, pushy agressive "where's my skin" type posts two seconds after purchase, highly likely to be a fraudster looking to get the skin and skedaddle before you realise, leaving you with a chargeback a few weeks later, and your skins warezed all over the net.

    Be smart, if it feels odd, it probably is, if it is too good to be true, it probably is.

    What a lot of resource providers are doing now is asking customers to verify they are a customer here, by using their xenforo.com account to post in a customer forum.
    John, meSingh and Bob like this.
  9. Robert F Schmitz

    Robert F Schmitz Well-Known Member

    Kim I have actually run across small merchants that have gone back to checks only because of chargebacks and not in software only. It is sad that people will resort to abusing a the system to get something for free.
  10. Forsaken

    Forsaken Well-Known Member

    I also get the customer verified by Jake or Lawrence for good measure.
  11. meSingh

    meSingh Active Member

    @kim thanks for the tips. They are worth trying. :)

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