HUNTINGTON BEACH, Calif. - Online bondage-gear store eXtreme Restraints (XR) has filed charges against a customer who allegedly committed credit-card fraud to make at least 74 orders under various aliases in 2006.
The orders reportedly were placed made from Westminster, Calif., under various names, including "Edna Ruiz." Although XR made only one shipment to Ruiz, the company said it incurred significant costs when it had to cancel the fraudulent orders.
"Ruiz apparently ordered merchandise using other people's stolen credit-card information, and the one order we did process was quickly charged back to us," Ari Suss, CEO and president of XR, told AVN Online.
Director of Information Services Sean Welch filed a claim against Ruiz with the Westminster Police Department earlier this year, and police obtained a search warrant two months later.
Police reportedly saw bondage gear in Ruiz's home and confiscated computer equipment to investigate whether it was used to place the fraudulent orders. After the police investigation, the district attorney will decide whether the case merits being processed.
According to Welch, the fraudulent purchases appeared to be "normal," but the credit-card information failed to correctly match in the Address Verification System (AVS). He said some "had a match" in the Credit Card Verification Value (CCV), the three-digit code on the back of a credit card.
Welch said XR has a procedure to identify suspicious orders early in the process.
"At the time orders are imported from our websites, they are checked against a certain criteria," he said. "Purchases can be flagged based on some of the following conditions: if the items are over $1,000, over $500 and international, or if the quantity of the item is greater or equal to six. Further indications that a purchase is suspect is if the ‘bill to' and ‘ship to' [addresses] are [in] different countries."
Flagged orders go to the company's customer-service manager for final processing, which involves calling the person being billed to verify the order and obtain a copy of photo identification and the credit card used to place the order.
"If an order is known fraud, we do not dispute the chargeback and [we] provide the order information to the issuing card company," Welch said. "If an order is not fraud and the customer has received their goods, we dispute the charge by providing tracking information, delivery confirmation and customer contact information to the issuing card company. We have a pretty thorough order-screening process that keeps our chargebacks at less than 1 percent of our transactions per month."