Credit Card Fraud & Phone Orders

As coin and bullion dealers, we understand that our industry is often targeted by online fraud due to the high value of the items we sell. Credit card fraud is on the rise, making it crucial for us to take proactive measures to prevent it. There are several steps you can take to mitigate the risks associated with selling gold and silver bullion online.

First and foremost, it’s recommended to use a reputable credit card processor like PayPal. However, it’s important to note that simply having an individual PayPal account is not sufficient. Setting up a business account will provide you with added versatility and an improved user experience. Once your account is set up, it’s essential to familiarize yourself with PayPal’s fraud tools, including their online transaction rules.

One of the most important rules to create is the “Billing and Shipping addresses must match.” This rule alone can prevent the majority of online fraud attempts. However, implementing this rule may result in receiving phone calls from customers. Be prepared for such calls, as fraudsters may try to persuade you to run their credit card through your virtual terminal since the online transaction was declined due to the address mismatch rule. Avoid falling into this trap. Always respond with a firm statement like, “I’m sorry, we do not accept phone orders.” It’s crucial to understand that scammers are well-versed in their tactics and can employ various strategies to deceive you. Their ultimate goal is to exploit your virtual terminal to process stolen credit cards, bypassing all fraud detection tools. Engaging in such activities can have severe consequences.

When scammers succeed, they typically have your product delivered to an empty home address in an affluent neighborhood, leaving you with no recourse. Furthermore, once PayPal identifies the fraudulent transaction, they will process a chargeback, deducting the funds from your account. This results in not only losing the products but also the cash value of the sale. It can be financially devastating, especially if multiple fraudulent transactions occur before detection.

Responding with a simple and straightforward statement like, “I’m sorry, we do not accept phone orders,” is an effective way to handle such situations. Legitimate customers will generally understand and respect this policy. Processing cards through your virtual terminal under these circumstances only benefits the scammer, leaving you vulnerable to financial loss.

It’s important to realize that if you choose to challenge PayPal’s decision after engaging in such activities, they may lock your account, withhold any funds in your account, and impose a permanent suspension on your use of their services. This is an unwinnable situation that can have severe consequences for your business.

We strongly recommend that you establish fraud filter rules and conduct transactions exclusively online. By taking these precautions, you can significantly reduce the risk of falling victim to online fraud and safeguard the integrity of your business operations.