How do you protect your work against Credit Card Fraud

[cgiscripts4u]

After about three years of using paypal I have just been hit by credit card fraud.

This was not for a Scriptlance project but I thought that it this would be a good forum for such a discussion.

I sell scripts on my website, payments are taken using Paypal and using the IPN system the script they have just paid for is emailed to them automatically.

Last week I added a new script and two days ago someone purchased the script in the above manner. Every thing looked good, the buyer was paypal verified with a confirmed address. I thought it was strange they did not try the demo but it was not a great concern.

Yesturday PayPal emailed me saying that they have taken the payment back while it investigates a potential credit card fraud. Now I am concerned :

1. between receiving the payment and Paypal claiming it back I had made payments out so my paypal account is now in the red - will it be suspended? (digitally sent items are not covered by PayPal Seller Protection)

2. The amount was just £49 GBP (about $95) so is not worth worrying about but I am concerned that this script is going to appear on the warez scene.

Is there much we can do to protect ourselves and our work from this happening?

[rapido]

1) They will suspend your account eventually.
2) It will proberly appear on Warez sites, that's what happens.

PayPal, are just utter crap imho.
You will find this happens a lot, anyone can claim this and paypal can't fight it so they go along with you and give you full refund. Same goes for non-recipt.

I don't accept PayPal myself.

I use:
MoneyBookers
E-Gold
StormPay
NoChex
Cheque
Postal Order
Bank Transfer.

This is all well and good but http://www.btclickandbuy.com have no security checks on sign up for Direct Debit, and someone set up an account with my company bank account and started buying things.

Basically with customer not present transactions fraud is so incredibly high, that you can't really stop it.

To protect yourself try using NoChex as your prices are in £ I assume you are British, and NoChex is UK only but chargeback and reversal free.

Try encrypting your scripts.

Easiest way, it with Zend Encoder and then write a licence file and have this auto zend encode upon entry of a customer details. Then gz the file and email, can be done it's a lot of work but if you get a fraudulent client you know were the script is running and their datacenter will suspend them if you ask nicely.

[hitman]

Paypal will charge if any negative balance from ur bank or ur cc (whatever verification details u have provided). I don't think they will suspend the account. One thing is sure even if u challenge that chargeback u will loose. So let the funds come to ur paypal it will wipe off the negative balance. Btw i saw ur site and that freelacing script http://myfreelance.cgiscripts4u.com/ u developed tht ?? It looks so close to one provided by smarterscripts . Did u modified tht or created a whole new one. Just a query ;)

[techcode]

What about giving digital good trougth some 'hardware' way. Like ship it on a CD? :)

Here's what I dont understand about those charge backs. They should be covered by inshurance. And inshurance company should cover all $ ...

[cgiscripts4u]

Thanks for your input - I realise that when it comes to a chargeback paypal are carp, and to date this is the first time it's happened to me, just wondered if anyone had any idea's on how to stop it getting to the warez stage. Maybe stop writing/selling scripts is the only way :)

Hitman - funny enough that is the script that was involved in this situation. I did a total rewrite from scratch. I looked at the format and features of a few of the freelancer scripts that are available and based my script on them which is why it looks simular to smarterscripts. It is not a clone of smartscripts freelancer, they have features/functions I don't and visa versa.

[cgiscripts4u]

What about giving digital good trougth some 'hardware' way. Like ship it on a CD? :)

Here's what I dont understand about those charge backs. They should be covered by inshurance. And inshurance company should cover all $ ...

Yea, I had thought about that, but then if you ordered a script online would you be happy to wait days for it to arrive on CD?