When A Affiliate Attracts Fraud orders and Charge backs

[hifromeddie]

Recently a affiliate signed up for my affiliate program (at Ejunkie) under two email address. They signed up at the end of February and in March.

Suddenly my sales (I sell digital downloads) in March were up, and I noticed several of the sales were referred by this affiliate (using two email addresses). Most of the commissions were about $25.

I paid the affiliate their commissions in April, perhaps too soon, because now that I paid them I am gradually starting to receive Google Checkout charge backs and Paypal charge backs, not to mention over a dozen cancelled orders (over $1000 worth) which were labeled "high risk" orders via Google Checkout (Google cancelled the orders before the frauder received my products).

After looking at the affiliate stats all the charge backs are coming from sales referred by the above mentioned affiliate.

I emailed the affiliate, but they never emailed me, and one of their email addresses no longer exists.

Apparently all the charge backs are coming from people who said someone used their credit card (either within their Google Checkout account, or Paypal account) without their permission.

Once I figured all this out I deleted that affiliate from my program, and closed my program (at Ejunkie) to any new affiliates so the above mentioned affiliate won't sign up again under a new email address (all the charge backs produced by this affiliate are ruining my Google Checkout and Paypal clean record if that is possible. I never got charge backs before this, and only very few refunds).

My question is, why was this affiliate attracting charge back orders?

Was it they themselves hacking different Google Checkout and Paypal accounts owned by others, and then purchasing my downloads....only for the purpose of creating sales so they could receive commissions from me?

Every single time one of these charge back purchases was made the downloads were accessed and the IP logged, and the email address and the regular mail address of the actual owner of the credit card used were all recorded and I have it all on record.....and it was different every time (not coming from one location).

Again, this is only coming from sales referred by one affiliate.

Is it possible the affiliate is simply promoting my downloads to a database of frauders somewhere in the world who are stealing other peoples Google Checkout and Paypal usernames and passwords so they can make a purchase at my website and get the downloads?

Anyone ever experience this with an affiliate?

In general it is sooooooo rare for affiliates (for me) to make one sale, and when they do it is sometimes to buy my products through their own affiliate links. But I finally get an affiliate that is producing a lot of sales, but now those sales are returning as charge backs (not only did I already pay the affiliate, but there is a $10 Google Check Out fee for the charge backs).

Any advice will help.

Thanks,
Ed

 

[Linda Buquet]

There's so much fraud out there it's hard to know for sure. But it sounds to me like it was affiliate fraud, where the affiliate made the purchases in hopes of getting a commission, using fake or stolen credit cards.

It's easy to fake locations, they could by using proxy servers.

Sorry you had to go through that!

 

[hifromeddie]

Thank you for sharing that Linda. I must have received almost 20 Google Checkout Cancelled High Risk orders during March, but never before that.

Google labeled them High Risk because fraud was suspected, and the buyer was blocked from receiving any of my products.

So perhaps that is where the buyer was using fake credit card numbers.

Odd enough, even though there was a different name used for each high risk order, most of the email addresses used were hushemail email accounts, but with different names.

The actual orders that did go through, but that are now returning as charge backs, are perhaps where the affiliate got their hand on stolen credit cards.

And it makes sense what you shared about using proxy servers.

And yet even more odd is the fact that just the other day, for the first time ever, someone got hold of my debit card number and started making purchases from different gaming sites (sites which I never use or visit).

I caught it right away because I check my online bank activity regularily, but before I caught it they already made 3 purchases ($100 total), and I called my 24 hour bank line and they returned my money immediately and closed the card.

Is it mere coincidence that I have that problem the same time I am having a possible affiliate fraud problems? And my debit card number isn't even stored on my computer any where and I rarely make online purchases, so not sure how they got it.

 

[Linda Buquet]

Very odd. Not sure. Certainly glad you caught it quickly and got your money back though.