At 23, Mick Spencer has grown a company from his parents' garage into a genuine competitor in the sports apparel and accessories business.
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He has given lectures on entrepreneurship and even appeared on a panel with Virgin boss Richard Branson discussing the future of business.
But despite his success, last month Spencer's company, OnTheGo Sports, fell victim to a fraud he estimates cost him around $25,000. Now he wants others to learn the lesson of his experience.
The scam started when OnTheGo was asked to supply a large order of drink bottles.
When a deal had been negotiated, the overseas customer asked if OnTheGo could use the customer's usual freight company and add the freight amount to the invoice.
The customer paid a 50 per cent deposit for the order – $9000 – via credit card.
While the stock arrived, the freight company never turned up, leaving On The Go with thousands of drink bottles at its Lyneham base and out of pocket for the freight. Then their bank reversed the $9000 payment.
"Westpac reversed that because they had the Bank of America come to them and say 'this isn't a legitimate transaction'," Spencer said.
"[The scammer] made the money on this freight company being a hoax."
While viewing the transaction with hindsight shows up only a few minor concerns, it's the credit card reversal which really caught Spencer by surprise.
"Banks don't really tell you you're not covered by any credit card transaction over the phone or online," he said.
"They say 'really sorry that happened, but we have to give the money back to the correct person, so you've lost the money'. If we had identification – a driver's licence or a passport and a scanned copy of the person's credit card – [and] the person had come into our store and done it, we'd be protected."
A Westpac representative noted merchants face an element of risk with online retailing.
"It's standard across the industry that unless a merchant physically takes the card and swipes, dips or taps it, then it is the merchant – as opposed to the defrauded customer, the card issuer or the bank – who is liable in dispute cases," the spokeswoman said.
"All new Westpac merchants receive training materials in fraud prevention to help inform them of the risks and what to look for in suspicious orders."
OnTheGo has implemented a new process for online orders over $500 and will likely donate the drink bottles to their humanitarian partner, Sport Matters.
"I'm absolutely pissed off, but ... we're not going to see the money so we're looking at it and saying it happened, it sucks, what can we learn from it," Spencer said.
Tips for merchants to prevent fraud:
USE an online cardholder authentication service such as Verified by Visa or MasterCard SecureCode.
REFRAIN from sending money to unknown third parties associated with a transaction, such as couriers.
ENSURE that refunds are only made to cards used in the original sales transaction.