Triangulation fraud is a resale scheme in which a seller takes an order, pays a merchant with a stolen card, and ships the goods to the buyer.
Three parties appear: the marketplace buyer, the fraudster who never held stock, and the merchant who is left with a dispute.
How it works
The buyer may be satisfied because the parcel arrives.
The cardholder disputes a charge from a store they never visited, and that store loses the goods.
Marketplaces should watch sellers who never take inventory and whose parcels originate at other retailers.
This pattern is narrower than any unauthorized payment, and it is not a telephone charge fraud.
Concrete examples
- A listing undercuts a store, and the parcel arrives in that store packaging.
- A new seller fulfills orders within hours without ever holding stock.
- Cardholders report charges from a retailer while marketplace buyers received those items.
Protective measures
- Verify marketplace sellers and the addresses that actually ship their orders.
- Watch for fulfillment that starts at another retailer rather than at the seller.
- Link card disputes back to marketplace orders when the stories match.
- Limit new sellers until a history of legitimate fulfillment exists.