today we are going to discuss webhosting signup and domain registration fraud. I know this is a scarey topic only divulged behind closed doors,  five floors below the company in a dungeon protected by knightsof the roundtable. hosting companies know that it exists, they have programs and departments dedicated to fighting fraudcand preventing it before it happens. it costs all parties involved time and money.

but, what about the lone reseller? big companies have the resources and experience to look at an order and say “that’s fraud” or turn away potential customers because they do not want to take on the potential risks.

even paypal and merchant systems such as authorize.net are not exactly up to speed. most reseller billing systems attempt to determine if an order is fraudelent before you process the order.

in my experience here is the best advice I can give you. get a merchant account that used authorize.net as the gateway. pay the extra fees (if any) for “fraud detection services”. run all new orders through maxmind. this system compares the credit card addresses given for orders against the ip address (from authorize.net transaction log) and gives you a score. it also can determine if an ip us going through a proxy. you can get a freelance programmer to create a way to review these accounts. ubersmith has these functions built right in, you just need a maxmind and authorize.net account.

paypal unfortunately does not provide ip addresses to vendors.
solutions? only allow customers who have previosly paid with credit cards and reviews to pay you with paypal in the future. turn on review filters at paypal.com Only accept payments from verified payal accounts. track ips in your order forms and manually review through maxmind. once again ubersmith already includes these functionalities.

chargebacks for fraudulent activity will hurt you in many ways. first you will spend too much time and money responding and fighting chargebacks as opposed to starting off with the right tools to begin with. you could lose your merchant account and not me able to process any credit card payments. every chargeback could incur a chargeback processing fee.

when fighting a chargeback you typically will suspend a hosting a billing account. you would rather spend your time talking to a customer who didn’t understand the terms of service or charge than someone wondering how you got thief credit card information.

web hosting guru asks:
as a reseller what are done if the biggest challanges you have faced ?

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