Fraud is the number one thing working against buyers and sellers of virtual goods. Payment services such as Paypal and other online payment services do not offer any protection on sales of virtual items. Here you will find some of the tools necessary to better protect yourself against fraudulent buyers and sellers. Access to the information requires membership. It's free. Sign up here.
Keywords: paypal ebay trust who fraud anti fraud Internet wow scam hoax thief rip off credit card bank computer game virtual goods Markee Dragon Marcus Eikenberry trade account powerleveling
At a recent company meeting I did quick interviews of some of our staff. Yes we are a bunch of hams. We work hard and from this video you can see that we play hard as well.
We just completed a study of all of our Paypal transactions for 2005 and 2006 with one of our online stores. The study included 55,000 transactions. We wanted to see if things like verified accounts, confirmed addresses, funding type or direct credit card payments through Paypal had different fraud rates.
Out of the 55,000 transactions there are 16,800 unique customers. We had 89 customers that had their payments reversed one way or another. We found something that was very amazing when we did the stats. So amazing that I decided to share it with all of you. We found that it does not matter what the status of their account is if you do proper customer verification on their first order.
Since 2005 we decided that it was up to us to keep from getting screwed by a customer. Not Paypal. Based on our stats I can safely say that as long as you do proper verification on your own of a customer it does not matter what status their Paypal account is in. I know that many of you will only take Payments from verified accounts or from accounts with confirmed addresses. Why limit yourself? If you do good verification you can accept more payments and improve your overall sales.
BTW: If you are wondering what the fraud rate is from these number. It's a loss of .529% That's about 1/2 of 1% and I'm damn proud that in this market we have been able to achieve this.
Trust Who is heading full force into the online sales of virtual items with a goal of making buying and selling of virtual goods as fraud free as possible. Trust Who is no longer a Markee Dragon site. It is now independent and operating as Trust Who LLC. Trust Who for the last few years has brought over 100 virtual sales sites owners together for the common goal of combating fraud. We have been very successful. The average fraud rate for all of us has been halved in the last few years.
Now Trust Who takes on a bigger role in the community. We are now providing full anti-fraud for multiple virtual items sellers. Our systems are proven. Our technology and staff is so good that we offer all companies that use our full services a zero fraud risk. The first two sites to use our services are www.kickassapps.com and www.goodsforgames.com . We have several more sites lined up. All of these sites are being provided with zero fraud sales and 24x7 live customer services for all of their customers.
At this time we are not accepting any new companies for these services. But we will be soon. The site here will be getting a bit of an upgrade, moving to a new server and then we will open the doors to virtual sellers who are interested in 24x7 support for their customers and a zero percent fraud rate.
Have you ever been scammed in game? Have you ever traded game accounts with someone only to get it recalled away from you? Have you ever sold someone an account or virtual items only to have the payment reversed? Trust Who announces an ID verification service that will reduce your risk on future transactions.
The single biggest problem with transactions over the Internet is that you don't know who it is you are dealing with on the other end. It could be an honest mature adult. Or it could be someone with the intention of scamming you. The Trust Who ID Verification service aims to show proof that you or other traders are serious about doing honest transactions.
Our verification system provides information to people you are looking to do business with without giving up all of your personal information. Here is an example of a verification. This is Marcus Eikenberry owner of Trust Who. The information shows that he has been verified to be who he says he is. Verification includes matching their name to an email address. Using Paypal or a Credit Card to verify that the persons location information all matches.
By verifying peoples identity and tying it to their email address this gives a way to know better who you are dealing with. Other traders will have more trust for you and scammers will know that you are not an easy target. they will be less likely to attempt to scam you. This saves you time and frustration.
We are very excited to be offering this much needed service. Removing anonymity on the Internet helps to reduce fraud. For more information about our ID Verification service please see this official information page: http://www.trustwho.com/idservice.php
I'm proud to announce a new service to help build trust with virtual buyers and sellers. The biggest problem with the Internet is it's ability to give people a high degree of anonymity. Being anonymous on the Internet allows a lot of people to do things they would not do if they were face to face with other people.
At one of my sites that supports World of Warcraft we have an account trading forum. ( Link: http://www.markeedragon.com/u/ubbthreads/postlist.php/Cat/0/Board/worldofwarcraftaccounttrading ) It's a very busy forum with 80 to 100 accounts posted a day that people want to buy sell or trade. The biggest issue in the forum is that people are getting scammed. Since everyone is pretty much anonymous it allows scammers to sore with a few people before they get negative feedback and then no one will deal with them. Then they just sign up a new account in the forums and start over again. It's really been very frustrating because nothing has worked to stop them. For those of you that instantly think that we should ban them. We've tried. Does not work. They just come back under a different name.
So the quest has been for that forum to some how reduce the scamming. I figured that if we reduce the level of anonymity that we can increase the trust between traders and get more honest transactions. So I have been working on developing a solution to this issue. Knowing that our forum and sales sites are not the only places that have this issue we came up with the following service.
Trust Who Will offer a paid service of ID verification. We are going to provide evidence of verification to potential buyers, sellers and traders. Here's what will be verified:
Paypal email address.
Paypal confirmed shipping address.
IP geographical tracking to the origin of the purchase of the service.
Telephone number verification.
We will actually talk to everyone over the phone and have a few questions for them.
Once a person passes this they will be given a link to a page on our site that will show the following:
Confirmed Email address (This is the key that everyone will use if you want to see if it is really them. People checking to verify the identity will be told to send an email and wait for a verification reply to confirm they are dealing with them.)
Real Name
We will list that their telephone number, shipping address and IP location match without showing the details to the public.
We will describe what this all means and give instructions on how to verify that you are dealing with this person. We will also show contact information so that law enforcement agencies can contact us with requests for the information we have verified.
For each person who has done the verification they will be given code for adding a text link or graphics showing that they have been ID verified by Trust Who. People will be able to display this on their sites or forum signatures.
We will promote this service to all of our traders and suggest to all of them that they do not buy, sell or trade with someone that has not been verified. Trading with people who have been verified will reduce your chances of being scammed does to about 1%. Right now by our best estimates up to 15% of the transactions currently happening are currently experiencing fraud issues of one sort or another.
We have one of our programmers working on the server side code for this right now. We expect to release this service to the public about March 1st 2006. We are not doing this to make money. We are doing it to reduce the fraud and scamming we see going on. the cost for this service will be only $5.
We do also plan to include a service very much like this for businesses. We will verify businesses and we will also offer a search system so that sellers can verify that someone has a verified ID status with us via a lookup on their paypal email address.
I'm really looking forward to this. Trust Who has been very successful in the reduction of customer fraud with the big virtual items sellers. Now we can bring these same benefits to the general public as well.
I just wanted to mention that this month Trust Who is 1 year old. Over the past year we have grown to over 100 members who are all sellers of virtual items through eBay and their online store fronts. A little over a year ago I had a fraud rate that was above 3%. That was actually a very good number. Retail stores commonly have a higher rate than this. But still I wanted it to be lower. My brokers and I had been talking about for over a year a way for all of us to communicate together about scammers. They needed to be identified quickly and accurately so that is one of us got scammed it would remain only one of us and not the whole team.
A few years ago we experienced first hand what it was like for our whole team to get scammed. I lost about $2000 to just one scammer and our team as a whole went well over $10,000 in losses. All to the same guy. This has never happened again since this site.
This site allows us to keep track of the info on scammers. We all report them in one forum that has an alert program that monitors them. This alert program is free to use by anyone. You can download it here. This program will cause a little flashing "TW" to appear next to your clock on your desktop. This alert happens within 5 minutes of a new scammer being posted.
In the last year we have posted several articles on how to safely accept paypal and how to reduce your risk of taking funds from scammers. I'm proud to say that now I personally have a fraud rate that is less than half a percent. I sell all over the world, I take paypal and credit cards.
If you are already a member make sure you get the alert program. If you are not a member and you sell virtual items or intangible goods as paypal calls them then you should consider becoming a member. There is no cost. It's free because the more people we have working together the lower the fraud rate is for the group.
I'm pleased that this site has been a success and from the trend I know it will continue to be in the future.
This is just a little bit off topic of the trust issues we deal with here. But this affects each of us virtual sellers. Hyper-inflations aka MUDflation is what causes our values in the virtual currency and items we sell to devaluate. It occurs as a natural part of virtual economies.
An example of this is that back in 1998 when I sold my first stuff in Ultima Online I found that I could get about $235 per million gold in the game. The current rate today is between $6.50 and $7.50 per million gold. An even more recent example of this is in World of Warcraft. When the game opened the average price of 1 gold was $10. Now just doing a search today it can be found as low as 21?.
These examples are not uncommon. Ultima Online has lost an average of 50 to 65% of it's value per year. So...... this begs the question. Is there anything that can be done by us to slow or stop this? I personally thing that slowing it is a "Maybe" and stopping it is a 100% "No".
Back in November of 2000 is the first time I really looked at this inflation. I was asked to sit in on a few panels at the first Ultima Online Faire. We had a few giant round tables with OSI Devs and about 50 to 100 players that were interested in the economy of the game. What we came up with was that there was an inflation problem. This problem was not just outside of the game in the real world markets but was also in the game.
Through talking we realized that there was just to much wealth in the game and that it was causing some items that were hard to get to rapidly raise in value. That uber sword that everyone wanted had increased in value over 10 fold in the last year. It was the general consensus of the group and the Devs that we needed some gold sinks. We needed something introduced into the game that would remove some of the wealth. We thought this would help to steady the economy.
The UO Devs that worked with us took back with them many great ideas. Many of us that worked with them on the ideas saw our suggestions appear in the game over the next several months. But it did not have the affect that we desired. It ended up that it didn't really help nor did it hurt the economy. So we were still at the same place as before.
My gut reaction on how to control the economy in the game would be to only allow so much currency in the game. It could be tied directly to how many players are on the server. I know for UO that this is not an option at this point. It may be an option though for some of the future games to come. This could however possibly not make any difference also as other items such as gems or what not could be used as currency as well if there was a shortage in the game.
So I don't think that this problem can ever be solved 100%. If we look at our own real life economy we see here that we can't control it 100% either. We have inflation. It's a fact of life.
The only thing that I know of that could be done for at least the external markets in these games would be price fixing. In the real world markets price fixing is against the law. Would those laws though apply to the sales of virtual items? If it did would it require the courts to find that intangible goods from video games have a real world value? The game companies don't want them to have a value. It's an interesting question.
Right now to control a market I would suspect that you would need to have a group that agreed to work together that made up at least 75% of the market. When you consider that there are about 100 big / medium sellers in UO alone it may be very hard to get 75 of them to participate.
I think the real solution here is that all of us can think about what affects we have on the market when we make changes. Will lowering my price by 10% cause the market to react and follow? Will holding steady decrease my sales so that I no longer make any money? Both are valid questions. Both are part of this balance that we play in this game of real world sales for virtual currency.
Something to think about. I know I do every time I have to alter my prices.
Many times I'll identify that funds sent to me are from a hacked or stolen paypal account. In the past I have held the funds thinking that if I do so and let paypal do the reversal those funds will then not be available to the hacker who has control of the paypal account. Thus saving the victim from additional loss. Sounds logical huh? Well that logic has been correct several times. But the problem is that you can actually incur additional charges to your account by doing this. I learned this the hard way.
I had 4 payments of $199 each come in 6 months ago. I identified them as fraudulent funds. The payments were made from 2 different accounts. I was actually able to get ahold of both of the real owners of the accounts. I told them both what they needed to do with Paypal to get their accounts held so that they would not take any further losses. I also reported to paypal that the funds were fraudulent. The next day 2 of the charges were reversed as expected. A few weeks went by and the other 2 charges still had not been reversed. I didn't worry about it though. I knew that I had alerted everyone that there was a problem with the payments and I had not delivered any product on these. So I didn't worry about it at all.
More than 5 months later I get notification that these are being reversed. It had been so long that I had actually forgotten about them. No matter. I knew I did not own the funds and didn't worry about it. Paypal asked for proof of delivery. As I am a virtual seller I of course have no proof. The resolution center they have has no option for "I don't qualify for seller protection" or for "No contest". So I never fill these out because none of the options apply. ( I've complained to Paypal several times about this )
Today. 6 months after the sale I get emails from Paypal. One part ticks me off.
Quote: Because the buyer's credit card issuer has returned the funds to the card owner, the amount of the above-referenced transaction has been debited from your PayPal Account. PayPal has been charged a fee from the buyer's credit card company, and a result we have had to assess your PayPal Account a chargeback settlement fee of $10.00 USD.
That's right. For my good deeds I'm charged $10 per transaction. Granted $10 is not that much considering the amount of sales I do. But it sure is insulting. So from now on. I'll just send a refund. I know it puts the owners funds at further risk because they are available again to the hacker. But the fact is that it will actually save me time and money if I do so. No more reversal notices where Paypal wants feedback and no more fees if it was funded from a credit card.
Moral of the story....... It costs you to be a nice guy.
Not to long ago I was scammed by someone who used multiple Paypal accounts from three different domains. They had setup these domains all on the same server. Then they created email accounts under each of these domains and started sending out payments from stolen credit cards using a different proxy for each payment sent. They were able to bypass the security at my code sales site at www.shatteredcrystal.com because my server didn't know that they were all actually the same person. They were able to take me for almost $2000 worth of codes before I realized what was going on and fixed this exploit.
When this first happened I was floored at the loss I had just taken and how simple it was for them to do this. I have since fixed this hole in my system. But it always bothered me that I was not able to identify what was happening sooner. My solution was a social one. I instituted a manual check on all orders from new customers. I searched in vain for about a week for a technological solution to fix this. One of my programmers told me to think outside of the box for this fix. So I was able to solve this problem. But it still bothered me that I was not able to pickup on the fact that it was the same person.
Well I've found a partial solution to this. There is now a way that you can look up a domain name or an IP address to see what other sites are hosted on the same server. You can find the service at http://whois.webhosting.info . If it does not give a list right away then click the link for "Reverse IP Lookup: IP hosts # domains".
This service will tell you for example what other sites we have hosted on the same server / IP as this site here. Feel free to try entering trustwho.com. You'll see several sites listed.
So as far as how exactly this tool is useful. You can use it to see if a scammer is using the same server over and over only changing the domain names they are using. It can also be used to find out more information about your competition. This is where this tool can be fun and informative at the same time.
I did some looking of some domain names of some of you here and didn't see anything very shocking. I also looked up domain names of some other brokers who are not involved with us here because they have something against me or whatever. Very interesting information I found.
I know in this area this tool will create a little heat for some people. It shows some clear associations between some brokers and also shows associations revealing hate sites against myself and others in our community. Pretty interesting stuff if you ask me. I'm not naming anyone just because I don't want the flak from those that have been or are a problem.
One last note on this service. All of the data shown is contained in a very large database that is maintained by the owner of the site the tool is located at. The results are only as accurate as their database. So brand new sites may take a while to show up. On the flip side changes that people make to current sites will not show up as changed for a while as well.
If any of you find any interesting relations out there and want to expose them. Feel free to reply to this thread. I think that many of us would be interested in what is found.
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All posts in our forums are the opinion of the person posting it and may not represent the opinions of Trust Who or it's members.
