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Candy Japan hit with credit card fraud

candyjapan.com

141–150 of 208 posts

Re: Candy Japan hit with credit card fraud

#141

I commented this on yesterday's jsbin article, and I'll write it again. Don't implement the payment processing code yourself. (And using Stripe is _still_ implementing it yourself - they supply only one part of the process.) Writing this code will take time that you are not using to develop and market your product. (cf opportunity cost). Your code will be buggy. Your code will be weak. Your code will not support the…

Totaly ignorant here:

Why would using FastSpring be safer than using Stripe?

Re: Candy Japan hit with credit card fraud

#142
Another interesting problem is that recent breaches have put so many cards in the carding market that clearing them seems to have become a bottleneck. If we could some how work with the banks to perhaps create honeypots for these people it might help us clean up the mess.

Re: Candy Japan hit with credit card fraud

#143
post #134

Earlier quoted context omitted.

In Canada, a distinction is made because the fees on debit are much lower (comparable to cash handling costs) and the banks have put tremendous marketing efforts in pushing for debit cards and branding them "Interac." That said, the cards themselves use exactly the same technology, look the same and debit cards are usually Maestro/Cirrus or Visa/Plus compatible so we can do debit transactions in europe. The online ve…

Canadian here, and I find that most of my peers (30s) use their credit cards for almost everything and their debit cards collect dust. The reasons are several: 1) CCs offer rewards (travel, cash back), usually in the range of 2% of purchases 2) CCs offer insurance and extended warranties on some purchases. 3) CCs help you build a good credit rating, which is important for someone who intends to apply for a mortgage a…

I do to for similar reasons. But I will use debit if the merchant extends me a discount, one of the gas station here for example gives me 2 cents off per liter which works out as more than the rewards.

However, I never do cash cause I never have cash on me. It's Credit for reward and then debit.

That said, I know a lot of people who don't do the rewards maximizing. Programmer/engineer crowd tends to self-select for people who are logical and number inclined.

Re: Candy Japan hit with credit card fraud

#144

I commented this on yesterday's jsbin article, and I'll write it again. Don't implement the payment processing code yourself. (And using Stripe is _still_ implementing it yourself - they supply only one part of the process.) Writing this code will take time that you are not using to develop and market your product. (cf opportunity cost). Your code will be buggy. Your code will be weak. Your code will not support the…

How is FastSpring different from Stripe? I can't tell from the website.

Re: Candy Japan hit with credit card fraud

#145

I also had something like this happen on a site I built for my wife's work's site, a Boys & Girls Club[0]. I had a donation button that let people make an open donation to the club. It's such a tiny site with little traffic, but apparently the SEO must be decent because somehow it got targeted by people appearing to come through Brazil and Poland. Suddenly one day, hundreds of donation attempts. Checking the failed t…

Wait, why would someone fraudulently donate somewhere? I don't understand the motive.

Re: Candy Japan hit with credit card fraud

#146
post #10

Earlier quoted context omitted.

Osiris' info was useful. I really also need to put in some fraud detection like that. But there are so many companies providing that service, I'm not sure which one to go with. How involved is it to integrate these? It's not my idea of fun to try look at these transactions manually, so until I get a motivation boost to go through with the integration it'll probably be PayPal-only.

>I'm not sure which one to go with. How involved is it to integrate these? I really like https://siftscience.com . The important thing is to not over-think things; it's rarely that case that you truly, honestly, really need real-time automated fraud detection. Start with implementing the absolute bare minimum. You'll then receive emails from e.g. Sift when a bad user is identified, and you can manually refund the tra…

I'm thinking about integrating with siftscience. How trustworthy are they? It looks like you need to send them information about your users and give them script access on your page in order to help identify fraudulent transactions. (which is completely reasonable but still requires a lot of trust on our part)

Re: Candy Japan hit with credit card fraud

#147

I also had something like this happen on a site I built for my wife's work's site, a Boys & Girls Club[0]. I had a donation button that let people make an open donation to the club. It's such a tiny site with little traffic, but apparently the SEO must be decent because somehow it got targeted by people appearing to come through Brazil and Poland. Suddenly one day, hundreds of donation attempts. Checking the failed t…

Wait, why would someone fraudulently donate somewhere? I don't understand the motive.

They aren't attempting to donate they are attempting to try credit card numbers to find ones that are valid.

Re: Candy Japan hit with credit card fraud

#149
Been working in e-commerce fraud for ten years...

The credit card security model is broken as designed with the exception of chip and pin and chip and signature.

Uptake for 3D Secure is uneven around the globe. Some places it is mandatory and others unheard of. For example not using it will negatively impact close rates in India but using it in the U.S. will negatively impact close rates.

With 3D Secure each issuing bank was responsible for how they implemented the process and it varies widely in both ease of use and security between issuing banks. Some banks may use simple passwords that can be fished while others may use one time pins sent by SMS to your mobile.

When a merchant uses 3D Secure fraud liability shifts to the issuing bank and the merchant gets a discount on the interchange. This is also true when the bank hasn't implemented 3D Secure or has done so poorly. Because of this when 3D Secure was launched some banks put out systems that were non-functional simply to avoid the liability shift (i.e. it would prompt for a password but there was no functionality to create one). Issuing banks have gotten their act together in the last decade but it's still uneven.

Even when a merchant implement 3D Secure the merchant still needs to manage fraud levels to card association rules even though the merchant does not have liability for the fraud. This is the "we have to assume the risk but we don't have to do business with you clause." Individual issuing banks may chose to decline all of a merchants transactions if loss rates are unacceptable and the merchant may still lose their merchant account if overall loss rates are too high. However because the charge back shifts to the banks the merchant may not even know which transactions are fraudulent.

Recently rules have been changed so that banks aren't required to prompt for authentication in all cases. This is called risk-based-3D secure. So even if Candy Japan had implemented it he still may have seen the attack because the banks may not prompt for that low of an amount. He wouldn't be out the money but still may be in trouble with the association if he didn't do something to stop the attack.

When looking at automation there are two fundamental risk that any solution needs to address. The first one is class separation which in the industry is known as scoring or out-sorting. In this area machine learning algorithms are well understood and there are a few companies on the market that will rent merchants a model such as Sift Science or MaxMind.

The second one is anomaly detection and in the industry this is know as velocity control. The problem is similar to detecting a hacker once they have penetrated the network, detecting a bio-terror attack based on hospitalization data or detecting insiders who have flipped. These types of things have generated a lot of military interest and a lot of DARPA funding but little of it has made it into the commercial market due to the high rate of false positives.

Card testing is one example of a 'high velocity' attack and are usually the work of professionals. High velocity fraud has been more common with digital goods but more recently we've seen more high velocity attacks where an attacker will upload a merchants products on a site like Amazon or eBay. When the attacker gets a sales they will use stolen credit cards to get the trageted merchant to fulfill the order. Since these are professionals they generally will have tested the merchants fraud systems to understand what is considered low risk by the merchants fraud models and unless the merchant has some monitoring losses can be very high by the time the charge backs start coming in.

Currently there is no automated, fool-proof method for managing these high velocity attacks that I'm aware of. Merchants initially started putting limits around the number of times that a single card could be used and the attackers responded with SQL injection attacks to get card in mass. Merchants responded with limits on email addresses or other data points and the attackers responded by mass registering emails on free email providers and registering their own domains. Merchants responded with limits on IP addresses and used of geo-ip location services and attackers responded with open proxies and VPNs. Merchants responded with limits on orders from co-location facilities and VPN providers and attackers responded by compromising end-user machines en-masse. Merchants responded with proxy detection and device fingerprinting and attackers responded with using RDP to end-user machines to launch attacks. And it continues.

Re: Candy Japan hit with credit card fraud

#150

Earlier quoted context omitted.

Yeah but in the meantime I still have my actual cash.

After I make my two clicks for which you have several months time (only needed to do that once) the actual transaction is reversed immediatly. That means even if I notice it three weeks later, the bank pretends the direct debit never happened and is not included in any interest calculation etc.

Well, that was my experience with American Express. I noticed a fraudulent charge, called them up and was done 5 minutes later. Everything was refunded immediately after I hung up. That was the end of it.

OTOH, my Chase experience was not nearly as smooth.

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