For a change

[Edward Bristol]

We hear a lot about buyers being ripped-off in the gem-business. Here is a different story.

A month ago I got an order for an Alexandrite from Kenya.

I get fradulent orders every day but they are usually stupid and easy to spot. People buy 3 big rubies with an US card and ask to ship them to somewhere else. Mostly those orders get sorted out by the credit card company and blocked straight away.

This time, however, the card company had cleared the sale but advised me to check the buyer’s ID.

Alexandrite is not commonly ordered by fraudsters. They prefer ruby or sapphire. I checked the delivery address: An affluent neighborhood in Nairobi. I called the number in Kenya and got a well-spoken Kenya Airway’s pilot who had a sweet story about the surprise for his wife.

I felt bad about discriminating but I asked the pilot to ID himself and he promptly scanned me his passport and Tax-ID with his matching name.

Wow, Africa is coming. Great. Love it. I apologized many times for being so distrustful.

We packed the Alexandrite and shipped it to Nairobi.

Well, you can guess the rest. We now have to pay back the credit card company and the Alexandrite is gone.

 

[GemFever]

So it was fraud? What do you mean by pay back the credit card company?

 

[GemFever]

Ugh, sorry, not at my most clear thinking this morning. Re-read the title and the first sentence. Sorry to hear about the rip off.

 

[TonyMontana]

Did you made some further inquires? Were the credit card stolen and the passport + tax number faked? Seems like fraudsters become more and more sophisticated. Sorry for you!

 

[minousbijoux]

I'm not following - if the credit card company cleared the charge, how is that your responsibility to make good on it?

 

[movie zombie]

guessing but i bet they called Ed to confirm the charge. he did. now it is an authorized by him charge.......

 

[minousbijoux]

But still - doesn't it seem like Ed did everything he could do in that situation? He verified the person and everything. Sorry to be obtuse, but does that mean vendors are responsible for charges when identity is stolen, and they have verified and it checks out?

I'll be interested to hear more from Ed, and now completely appreciate the difficulty he has with doing business overseas.

I'm very sorry this happened to you, Ed.

 

[Lisa Loves Shiny]

Sorry this happened to you Ed.

 

[Starzin]

Thanks for posting Ed. You did all you could and still it wasn't enough, I'm really sorry it turned out that way. Is there no recourse through the CC company? After all they were suspicious enough to warn you.

 

[Edward Bristol]

Thanks for your replies.

As I have learned the hard way, the card companies (perhaps because they are banks are not on our side at all; despite the 10% they take from every $ we make.

It is very different when you use a credit card in a B&M shop. One can not back out there, having signed the purchase in person.

On the web, the seller has no such protection. It is a different law that applies for online sales.

In our case here, the buyer in Kenya actually had shown me papers matching the card owner name. They must have set up a whole fake ID and gotten a card for it. I think they have found a new way of playing the game and I do not understand how they did it. Just I have to be double careful and advice my other fellow merchants to be wary.

By The Way: 10% they charge just for this industry which is considered “high-risk”. Many card companies do not even allow online sales of gemstones. So there is not much competition and we have no alternatives, other than offering discount for wire payments, which again is a reason for them to throw us out if they want to.

 

[chrono]

Ed,
I still don't understand the situation with the CC company. I've had fraudulent online charges on my CC which I contested (after I received my monthly statement) and the CC company did their investigation which proved my case that it was fraudulent. Shouldn't that be the same for you? It should not matter that it was online or not (mine was online) and should not matter if it is the buyer or the seller.

 

[missy]

Ed, I'm so sorry this happened to you. If the CC company is not made to stand behind their approval of the charge this could affect many people all over the world and change the whole game IMO. It does not seem fair at all. I know that AmEx always calls me personally whenever there is any question in their mind about a charge and I appreciate that. Why could this CC company not have called the customer to have asked them to verify certain details that only they could possibly know? It seems quite the burden to put on the vendor and also impossible to be 100% sure from your side. Again, I'm so sorry and I hope this can be sorted out in your favor.

 

[Kitten35]

Chrono,
I am wondering if it has something to do with the fact that he works in high end items or something. I have had fradulent charges on mine too, but I'm a consumer. Maybe when you are the one selling such high end items they won't go after someone if it is fraud? Which isn't fair, but maybe there are different rules?

Sorry this happened Ed.

 

[chrono]

Kitten,
I have no idea but I'd certainly like to know more as well.

 

[aviastar]

I help run a small business- no online sales yet, but it's coming- and you better believe that the CC company will go to bat for the customer almost 100% of the time in a dispute, no matter what the circumstances are. It's one of the reasons the owners of my company have resisted online sales for so long. We even had company who wanted to hold a larger purchase for 90 DAYS for the dispute period to expire even though we had the customer signature in person and his bank approved it and moved the funds, before discharging those funds to us. Needless to say, we cancelled that transaction, he wrote a check, and we switched merchant services companies! And when you do refund things paid for with credit cards, you are still out the transaction fees- so it's not a wash, it's a loss. Cost of doing buisness!

And if the customer is obviously fradualent, like in this case- the CC company will do everything they can to make sure they are not the ones left with the loss. Because they approved the purchase, Ed could probably take it to court, but if the cost of repaying is less than court fees, a lawyer, time away from the business to deal with it...

CC companies are on no one's side but their own; we all use them, businesses have to accept them, so they have a captive audience.

 

[Edward Bristol]

Well, I also can't explain how exactly this could happen other than the 'pilot' must have found a savvy way around the security checks and then duped me nicely on the phone.

 

[minousbijoux]

So in a nutshell, in the future, is there a way for you to put it back on the credit card companies and have them prior approve the sale before you step in? As you said, there is no way for you to verify that this person didn't steal the passport and other documentation of the pilot, or simply create fake ids for the same, but presumably, the credit card company, as someone earlier has said, has special passwords and account info that the buyer would have to verify before making the sale, right? Otherwise, is the answer that you can no longer do internet business with individuals in certain countries?

Boy, that would be bad.

 

[Edward Bristol]

Otherwise, is the answer that you can no longer do internet business with individuals in certain countries? Boy, that would be bad.

Many web-companies have that rule, yes. It is sad.

See, the one thing that was so maddening for me is how I beat myself up over discriminating against somebody because he lives Kenya and has an African name. I really felt like a complete a.-h. at the time. Then that!

As for the legal position: When an order comes from any not-100%-first-world country (including, I am sorry to say, Spain, Turkey, Singapore, HongKong, Middle East etc.), the card company will issue a warning: Verify ID.

With that warning they have done their part.

If we check ID and find it OK - bingo - its our problem.

Sure, I can get a lawyer and say look: ‘I did all I had to do' etc. But I am really not into those bad vibes. I'd rather invest my time in my future business than in past losses. It is a drag to fight such organizations. Small businesses always hold the empty bag.

 

[Pandora II]

What would the situation be if you used PayPal or similar rather than a direct credit card?

I know many people in businesses over here (of varying products) who will not deal with African countries under any circumstances. I wonder how these fraudsters will get round things once the vast majority refuse.

 

[chrono]

Pandora brought up a good point - what about PayPal? I buy quite a bit of things from overseas vendors although not very high priced. As added protection, I stick with PayPal who acts as an additional buffer between myself and the seller. Will PP offer the seller this additional fraud protection as well? Perhaps wire transfer might be the only safe method for international sales from a vendor's perspective.