PAXUM: Anti-fraud, or..?
 

Hello, GFY

Please read this, especially if you do business with PAXUM, or intend to. The conclusions are yours to make.

We?ve been enjoying Paxum for a while, but recently we?ve been having a huge issue with them. Live and learn, they say. I?d like to point out that we?ve REALLY tried to settle this big issue peacefully. Alas, the replies from Paxum seem to be as cynical and just wrong towards customers as they can possibly be.

We and other webmasters/businessmen from Master-X, a major Russian webmaster message board, were apparently scammed by a carder who did his dirty business through Paxum.

We used to exchange Webmoney for Paxum from time to time, not commercially, with no commission involved, for our own purposes only. There?s no rule against that in the TOS.

One day a friend tells me, check your Paxum account, there may be refunds there. It took me a while to see the transactions because there is a lot of them in my account, but I filtered them and boom, here?s what I saw:ha

908944 2012-01-23 16:05:58 Reverse: Received money [email protected]aRefund 1,068.00ha
3908938 2012-01-23 16:05:43 Reverse: Received money [email protected]aRefund 850.00ha
3908926 2012-01-23 16:05:29 Reverse: Received money [email protected]aRefund 570.00ha
3111817 2012-01-09 07:15:14 Received money [email protected]aTransfer 1,068.00ha
3090203 2012-01-06 18:22:13 Received money [email protected]aTransfer 850.00ha
3037511 2012-01-04 08:40:35 Received money [email protected]aTransfer 570.00ha

Refunds, with NO notifications, emails, phone calls etc whatsoever. The money is just GONE.

Nice, isn?t it? Somebody transferred funds to our account and then supposedly requested a refund.

However, what the TOS say is ??(g) User agrees that all Transactions initiated are final and not reversible.?? Which kinda means refunds are technically impossible. But why the Reverse button in the customer area? Anyway...

I contacted the support department right away (emails and phone). Here?s a ticket with Id #139301 of 2012-01-24 06:45:40ha

They replied pretty fast.

Paxum9 Re:refunds [email protected]a2012-01-24 15:45:48ha

Mr. ......

The aforementioned account has already been suspended in our system. We regret to inform you that all transactions originating from that particular account have been refunded, as they originated from fraudulent credit cards. The originating bank has put a hold on the funds and all transactions had to be returned at the bank's request.ha

We regret any inconvenience this might cause.ha

Best regards.ha

--

No signature, no real person here. In a way, feels like the ePassporte situation. Zero evidence about the supposed carders. One could expect at least some evidence, police reports, bank documents etc. But the way I feel about it, Paxum just took our funds to fix its own security breaches.

Why did they take the funds from the last person in the chain?

We gave it a look and turns out this carder guy generated about $20k of losses total. Very unlikely to be carried out through 1 account and in such a short time, right?

If they accept such big loads, where?s the hold period? Right, this is our fault and it?s left for us to deal with.

But there?s more. I asked for some proof which could explain the situation, and I asked what their solution is going to be. No reply so far, Anton (the Paxum rep handling Russian language boards) never replied to my email. Still, I managed to reach him via PM on that message board. And it was surprising, I gotta tell you.

Message 1 (translated from Russian):

Alexander,

As you were withdrawing (cashing) the funds for third parties, you will be held responsible for all the risks associated with such transactions.

If you received funds as payment for hosting, there would be no problems at all. Instead, you let the funds go through your account not even knowing who the client actually is. This is classified as money laundering, and I?m sorry if you feel you?re an innocent victim here. Because of this, cheaters and carders thrive because they know they can launder their funds in this way.

--

How about that? Not exactly a high-ranking executive willing to look into the clients? issues, is he? Every webmaster out there is in fact a potential scammer, this is what he?s actually saying.

But how could I possibly know that much about any client? I studied the TOS and I thought I was fine. You built almost a fully anonymous system trying to get a bigger market share. I guess your account approval department receives the documents just for lulz. Turns out there?s no account holder screening whatsoever. Why do you even have the rating system ? which is really weird with not more than 5 irrevocable references?

Anyway...

Message 2 (also translated):

If you received the funds as payment for your services, you would be innocent as it?s totally our responsibility. But here, I see that you see nothing wrong in buying Paxum from a somebody for other e-currency. This is a money service transaction, and you are supposed to have a license to do that. It?s your obligation to know who is your client exchanging the funds.

Businesses which offer e-currency exchange operate in this way and know they?re supposed to exercise common sense and not play an innocent fool.

If you are engaged in financial transactions and do not do any checks, you have to understand you may end up being used to withdraw stolen funds. This is exactly what you helped to accomplish here. This is entirely your risk.

If we are contacted by legal authorities, we would have to show the way the funds went. Guess what your role in this chain would be?

If you still don?t see anything wrong with what you did, guess we have nothing else to talk about.

--

After that, I thought I?d reply in public.

Dear Anton,

1. Just a ?somebody? is an approved Paxum customer. Who happened to load his accounts with over $20k of stolen funds, oops.
2. If I didn?t tell you I purchased Paxum for Webmoney (which is legally not even a currency, as you know), you would have never found out. I just had no reason to lie or to conceal things. There?s nothing in the payment details. I could just retract my words and say I got this money as payment for a hosting account.

I want you to keep your word and return the funds. You somehow felt it would be ok to take them from us without any notice.

3. Everybody else, please make sure you get a ?license? ASAP, or you?re in trouble :)
4. Turns out some e-currency exchange businesses also lost funds because of this.
5. An innocent fool? World class customer service and account management here!

When the authorities do contact you (and they will, this was already initiated), you will have to show everything ? and we?ll have a look. We have nothing to be afraid of, but I?m not so sure about you. Why the rudeness and the threats, anyway?

Our claims are $2,500 total, and the figures are larger with other people. Some of them may want to post in this thread. All of us kinda feel we lost $20k to cover your losses because of insufficient security measures.

So, grab your popcorn, everyone, there we go. I?d especially like to hear from those who exchange e-currencies, what?s their experience. You may want to warn your customers about what?s going on.

cheaters never win.

/thread

I lost 1500$ once on paypal with same method.In shortly,if someone uses stolen/fraud cc regardless of service he used...You are fucked.

is it normal to violate TOS?

Well maybe they forgot to update their tos since they added cc loading recently.

It's for the very reasons above that I refuse to do *any* exchange of funds. Too much risk for me...

(Correct me if I'm wrong, but don't almost all ToS for payment providers disallow "exchanging" funds?)

Paxum's position on this makes sense to me.

Only paypal and moneybookers.

Interesting. Thanks for the info.

crazy stuff

It gets worse. There isn't just the risk of fraud. Those still doing transfers will probably find themselves in a lot of trouble.... tax-wise.

The risk of fraud, changes in legislation over the past 2 years and the refusal of a lot of people who want/need a transfer to do things the smart way,... make doing transfers simply not worth it anymore (not even if you charge 10%).

If you're an EU based exchanger and you ask your EU based clients for their VAT number, the majority will reply with "you don't need that because Paxum/Moneybookers/Paypal/LR/... is "off shore"" :1orglaugh Disaster waiting to happen.

Sorry but they're right on this one. You took the risk with somebody you didn't know and you got burned.

Forgot to add WMZ too,they banned exchanges before year or two.

Money lol money money lol lol

Octav please check your e-mail and write here anything. As CEO of Paxum, Thanks.

:1orglaugh

russian webmasters. the end.

Yes, and Anton_paxum - russian cheater and "vice president" of Paxum.
Stay with us (c) Anton_paxum

i disagree with that sweeping and outdated generalism because (correct me if I am wrong) Paxum both approved the account of the customer who commited fraud (which would have involved him proving his ID) AND approved the loading of the funds into Paxum which MUST have been in the same name.

The fact that the OP accepted these funds for a money exchange rather than selling hosting etc is immaterial.

Unless they have updated their TOS and removed "?(g) User agrees that all Transactions initiated are final and not reversible." I would say the OP has a case here and also has a point when saying that it is a warning for all other Paxum account holders that accepting Paxum is not as "final" as you might have thought. :2 cents:

Can someone share contacts Paxum owner?

Seems to me that Paxum handled this correctly

Anton_paxum - russian cheater and "vice president" of Paxum - Octav please take a look at this thread and help us to solve this problem as Anton just want to close about 7-10 account of working long time verifed webmasters which have in paxum account with 5 - 50k every month, in every account and do not want to support us all this webmaster got refunds from one paxum client, as security of paxum have a problem.

I do not belive that paxum can do this with their clients !!!! :mad:

He write my name in cheaters without any rason !!! That is really hard. Anton you can not be "vice president" of Paxum. As "vice president" of Paxum need to save their client and take care about thems. !!! As we are working for you and help you to earn money.


Please Octav take a look at this and help us! Thanks.

Would be better if Paxum disabled funding from credit cards...
Cause few crooks and idiots can spoil a good system abusing this feature :(

I bet that all affiliate programs are funding their accounts with wire transfers, not credit cards anyway, so whats this risky shit for... Looks like more pain than gain, even for Paxum...

:1orglaugh

At Paxum we do not tolerate fraudulent activity. We strive to have the most secure platform available.

If a cheater is found to be using our service fraudulently then we make every endeavor to swiftly return any available funds to those clients affected. We have been helping programs eliminate fraud by removing carders from the system and we have always tried to return as much as possible to the originating accounts.

Every business client is free to use our system to perform legitimate business. To be clear, we do not have any partnerships or private arrangements with any exchanger company, and every company using our services is expected to be responsible for their transactions. Our terms and conditions are clear on this issue. Some accounts have been cancelled already, but accounts that we do not believe were related to the actual fraud are still active, but have had the transactions reversed. We always pushed for strong KYC regulations, and we urged exchangers to do the same. We know where the funds went, and were able to retrieve them. We wish everyone would do the same and cheaters wouldn't stand a chance.

As always, we will take steps in order to limit transactions of this kind in the future, and prevent extensive damages in this case. We do NOT tolerate fraudulent or money-laundering activity in any way. Our stance toward fraud and the way we handle these situations will not change. We will always strive to return the funds to their rightful owner.

so its not any safer than paypal

RuthB, the problem is your security dept let ukrainian carder to add by cc and withdraw by p2p $20K with 10 different photoshopped accounts. And you're trying to make guilty only these "accounts that you do not believe", which simply exchanged paxum to another e-currency using your p2p system.
One of these 'accounts' is well known on russian boards hoster, another one is big e-currencies exchanger. But you dont matter, you don't think this situation is your fault too.

I agree so much about this, allowing cedit card uploads is asking for fraud. Ruth is there anyway I can block incoming payments from accounts using credit cards to upload funds? I must admit this thread is very disturbing, so far Paxum has worked like a charm for me, but allowing credit card uploads is asking for trouble in my opinion. Does it really make that much of a difference to paxum as far as profitablility? If not drop it please.

Yeah problem of Paxum that they add this option and do not think about security. So some guys just send to paxum system ditry money and it is possible that today they are working again and send this money and looking to withdrowal thems.

And people like me and more other payed for your mistake for your security problem. And The more of all it is hard to hear from your Partner Anton that he just want to close all acount of people which speak about this to webmaster boards and want they know about this problem. :(

That reply from RuthB just makes it seem even more dangerous to accept Paxum.

Where do you draw the line in this chasing of funds around? A fraudster loads with a stolen card, pays somebody else for some service, and the person that he paid then buys traffic from Choker (example of reputable account holder) which he delivers.

If Choker leaves any balance in his Paxum, do you snatch it back? Or do you accept that Choker accepted the money in good faith and bear the loss yourselves?

If the answer is anything other than "yes", then you should either immediately stop accepting credit card uploads or drastically reduce limits and improve security procedures because this could kill your up until now, well thought of business. :2 cents:

Money is in motion No need to worry ...

Ok, follow the logic:
- Credit cards were stolen (about 20 of them).
- Carder passed all PAXUM security measures (this is another story, according to PAXUM executive, they suspected CC fraud and warned just one client not to have any business with this person, but let other to proceed; i assume they did it in purpose to make money on transactions) and was able to deposit money from cards to his account.
- carder paid from this account for services

->

- Bank initiated a charge back to recover clients loss
- PAXUM pass refunds through all chain of clients (if PAXUM client does not have sufficient funds on his account, PAXUM passes remaining balance to the next money receiver in a chain)

What do we have in the end?
- Bank does not press charges, because there are no losses
- Carder has stolen money and happily continues having "business" with PAXUM
- Paxum charges fee for each transaction, including refunds
and you are the last in chain - punished for trusting PAXUM and following TOS.

There is no way for me to check each and every customer whom we are dealing with, IMHO i pay fees to PAXUM to cover anti-fraud department expenses, whose primary responsibility to prevent illegal activities. If they fail in that, it should be PAXUM solid responsibility, otherwise they have to change their terms of use to be clearer and stated that "Transactions initiated are not final and can be reversed ...?. I think it?s common sense.

Dear RuthB please we need your support call to CEO of PAXUM show this thread.

Lets stop this thread and solve this problem with help of PAXUM CEO it will be the best reason and every webmaster can see how paxum support their clients which work with thems for long time even from the start of comapny.

As we can speak abut this long time without reason...

:pimp:pimp

It's a good theoretically,but we live in real world, and it's real life situation. You are punishing clients who played by the rules that you've set, sometimes directly, sometimes indirectly. How would you feel if money from your PAXUM paycheck will be send back because they came from the fee, that was charged from stolen credit card? And your employer will refuse to compensate it? Will you trust your employer and keep working for PAXUM? Personally, i don't think so.

I've read in Master-X topic about refunds were made to some accounts that didn't send any money to injured. Despite there were many questions about it to paxum support reasons aren't clear totally as I can understand. But I dare to suppose it's important nuance needed to be discussed on GFY too. Anybody may comment it?

The issue that has been brought up in this thread is inconsequential to honest people that are here to make a living. We did not reverse *and will not reverse* any transactions that were destined to any such people.

All transactions that were reversed involved funds funneled through accounts whose purpose wasn't to provide a direct service or product, *but to commit fraud or aiding others to commit fraud*.

In reversing funds that we found to be linked to the original fraudulent funds, we are trying to protect the integrity of our system and provide the people who wish to make lawful transactions with a safe and clean environment to work in.

In so doing, we hope to deter future fraud, and inspire more confidence from our trusted clients, by showing that we do not want any part in any type of fraud.

Anohter Paxum success stories...

:1orglaugh:1orglaugh:1orglaugh

So, you're basically confirm that PAXUM is unreliable service, and even if somebody only conducting business with good known partners, there is a big chance that one of their partners previously unintentionally got fraudulent money. Thus the one will end up with no money on his account and bad reputation because his clients? money were withdrawn too, like it happened with several people. How nice of you to make your trusted customers pay for your mistakes. Now your trusted clients will sleep ?well? knowing that you ?do not want any part in any type of fraud? and you will pass all responsibility to your clients, sleep well knowing that you can steal their money any time without any notification. Wow, what a monkey business!!!

You want security? get a bank account and receive wires. Might cost a little more now, but better than being screwed for much more later.

We've had nothing but trouble with paxum, and are considering dropping the service altogether because their system is shitty. We try to load funds from our business debit card, attached to our verified business bank account.. it says instant but takes 3+ days before the funds actually reach our account.

In the end, I see paxum heading in the direction of epassporte. At least it was actually easy to upload funds and send them through epass before they screwed people out of millions...

And Ruth... those people you are calling in ever so bold font fraudulent were following your companies terms of service. So if those people are fraudulent then so is your company for allowing it to happen.

vdbucks, what kind of millions are you talking about? $20k it what PAXUM reputation worth. Russian management there is so cheap, that they ready to play russian roulette: $20k vs company well-being.

Glad that things got resolved. Congrats to all parties.

What congratulations? :Oh crap
The problem is not solved. Anton_paxum (anonym) :helpme did not reply to any our questions.

So far Paxum is fine if you use it for purpose its indended for - Paying and receiving affiliate commissions.

1. The many affilates programs use exchangers for work
2. No one can be reliably protected there
3. No evidence, only words:helpme

1. Who is paxum_anton? What place does it take in your company?
i44 dot tinypic dot com/2d6usz6 dot jpg

2. Why does he sidetracks an issue about his personal data and stay anonymous?

3. His rating is very negative -1225. This shows about his level of confidence among webmasters.

4. Why he let to insult and mock on clients on the forum in open form?

5. Why did he personally closed our account and also closed it to them who are disgusted by this situation?

6. Why he doesn't give any proofs about fraudulent activity? Maybe there was no fraud at all and that was your try to earn?
Such cases already happened in history. Is this normal? You are losing us as a client. I withdraw the rest of funds in amount of $10000 as Anton indicated.

7. Why did you withdrawed ouf funds without contacting or sending any notification to us?
This is direct violence of your terms.

8. Why do you withdraw money in chain and expose your customers to a risk and the whole system becomes unsecure?
A lot of affiliate programs work with exchangers, so by doing this you jeopardize them.
In your system who can be sure in his security and why I must believe to you?

9. Why did you make refunds to customers on which accounts there were no money income?
I have these evidences and also there are some on MasterX

10. Why do you charge a transaction fee even for refunds? Do you want to earn money by all means?

11. Why did you permit to a carder to open tens of accounts and add money to them without verifications?
You wanted to launder funds during a month?

12. Why one of the exchangers and Anton together approved that they knew about the fact of existence of carder in the system?
And they pointed this to one exchanger, but gave a miss to this carder, didn't attempt to do additional verifications and hold money.
You know the end.

13. How many such dirty money in the system and why I must believe to you about it's absence?

14. What is total monthly turnover passing through your system?
How many mployees work in your company, how many members are in security and antifraud departments?

15. How do you plan to solve the problem with injured?
We want to address to bbb.org, mastercard. We still didn't do this, but we are ready.
You don't care to lose your reputation in the eyes of your clients?

I want to hear detailed answers on every point above, I think everyone wants this too.

P.S.: I examined how works verification system in PAXUM and opened an account on my grandmother, she is almost 80 years old.
PAXUM has verified an account in about two hours. All the carders are welcome!

While I think you assumed a lot of risk and blame yourself when doing money exchanges with people you didn't know very well I still believe you raise some good points. If you have suspicions that Paxum is committing some sort of fraud against you then you should contact the relevant government agencies in both your home country and theirs to file a complaint.

More than likely there are laws in place already to cover some of these situations and hopefully Paxum is following them because we see they exist for a reason. So talk with support calmly and if they refuse to work with you get your money out and contact the governments and agencies.