Fake FedEx Returns: The Newest Credit Card Scam

Fraudsters never miss an opportunity to perpetuate fraud against unsuspecting victims, and their tactics to do so are becoming more elusive. Even when the initial order appears legitimate, cybercriminals are now finding ways appear at other points during an online transaction — even posing as a merchant to redirect FedEx shipments.

E-commerce merchants must stay on top of these developing trends and evolving threats to ensure their business’s security. Perhaps one of the most important steps retailers can take today is partnering with a trusted fraud protection solution to protect against the inevitable (and costly) chargeback fees.

Clever Fraudsters Pose as Merchant to Redirect Shipment

Recently, a ClearSale client was the victim of a savvy fraudster who managed to redirect a shipment by making a simple phone call to FedEx.

The merchant received an order, and when ClearSale reviewed it, everything looked legitimate: The billing and shipping addresses matched, and the Address Verification System (AVS) check came back positive. As a result, the order was approved.

But even legitimate-looking transactions can sometimes be fraudulent – as was the case in this situation. Not long after the purchase was made, the card-holding customer initiated a chargeback on the purchase, claiming they never placed the order, and ClearSale began investigating the transaction.

So, what went wrong?

After checking the transaction documents, ClearSale learned the fraudulently ordered product was never delivered to the customer by FedEx.

In fact, FedEx claimed they received a call from the merchant (it was actually from the fraudster) requesting that the shipment is returned to the store — but to an address that was different than the origination address. This address turned out to be that of a freight forwarder, and from there, the trail went cold.

Because FedEx believed it was talking with a merchant representative, it honored the request to change the shipping address. And when ClearSale notified FedEx of the fraud, FedEx reported that it doesn’t cover this type of fraud unless a merchant purchases specific insurance.

Chargeback Guarantee: Protecting Merchants Against Credit Card Scams

With most other fraud protection solutions, this fraudulent purchase would’ve resulted in big chargeback fees for the retailer.

But this merchant had the power of ClearSale’s guaranteed chargeback solution behind them. ClearSale’s chargeback insurance offers a 100% guarantee that covers the merchant if the fraud solution approves a transaction that turns out to be fraudulent and results in a chargeback. So, the merchant wasn’t out even a penny in chargeback fees because ClearSale paid the entire amount of the chargeback fee.



For guaranteed peace of mind, your business needs a fraud protection solution that protects against today’s clever fraudsters. Talk with a ClearSale credit card fraud analyst today to learn how we can help!

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