Longtime user posting from a new account out of an abundance of caution.
I founded an e-commerce marketplace startup. We use PayPal's Multiparty APIs (PayPal Commerce Platform) for checkout. For the 10 days, someone has been bombarding us with purchases that they later dispute. There's consistent pattern to it:
* They use an email address that has no footprint online, always from the same two domains
* They use an unverified PayPal account to pay
* They pay a low amount, not always the same, in a narrow range for a digital item
* All of the charges were disputed within a few hours
They're not doing this through our API. The purchase process requires a browser because of the way our payment form is configured. There's an amount of variation to each purchase that tells us they're automating a browser. Logs indicate that they're changing IP each time. The events come in bursts and seem to be spaced to avoid automated detection.
We added the typical mitigations to our network stack and code. A few are still slipping through. Logs indicate a high amount of bot traffic.
PayPal does not seem equipped to deal with this. Their support is always extremely slow, relies on canned responses, and to date has a very limited understanding of how their own Multiparty APIs work. Their phone support people will not talk with me, they see no indication that my PayPal account is affiliated with these purchases in any way. They want each of our sellers to contact them independently, which we know will result in disparate cases that don't tell the complete story or offer any assistance.
Has anyone encountered anything like this before? We're struggling to find the motive or intended outcome by the attacker(s). We're a small company with a niche audience, we've never had a conflict with anyone that got serious enough that we'd expect them to come after us like this.
Any thoughts and recommendations would be greatly appreciated. We feel like we are on our own here and are unsure of how to handle it.
We're struggling to find the motive or intended outcome by the attacker(s).
The highest likelihood for me is that they're doing card/credential testing. They have either stolen or purchased a large number of stolen credentials. Those credentials are worth more individually if they are known to function. They can use any business on the Internet which sells anything and would tell someone "Sorry, can't sell you that because I couldn't charge your account/card/etc. Do you have another one?" to quickly winnow their set of credentials into a pile of ones which haven't been canceled yet and another pile. Another variation of this attack is their list is "literally just enumerate all the cards possible in a range and try to sift down to the cards that actually exist."
After sifting through to find the more valuable cards, they sell this onto another attacker at higher price of the mixed-working-and-not-working cards, or they pass it to their colleague who will attempt to hit the cards/creds for actual money.
Digital items are useful because people selling them have high margins and have lower defenses against fraud as a result. Cheap things, especially cheap things where they can pick their price, are useful because it is less likely to trigger the attention of the card holder or their bank. (This is one reason charities get abused very frequently, because they will often happily accept a $1 or lower donation, even one which is worth less than their lowest possible payment processing cost.) The bad guys don't want to be noticed because the real theft is in the future, by them or (more likely) by someone they sell this newly-more-valuable card information onto.
This hit the company I used to run back in the day, also on Paypal, and was quite frustrating. I solved it by adding a few heuristics to catch and giving a user matching those heuristics the product for free, with the usual message they got in case of a successful sale. This quickly spoils your website for the purpose they're trying to use it for, and the professional engineering team employed to abuse you experiences thirty seconds of confusion and regret before moving to the next site on their list. Back in the day, the bad guys were extremely bad at causing their browser instance to even try to look like a normal user in terms of e.g. pattern of data access prior to attempting to buy a thing.
Hope some of that is useful. Best of luck and skill. You can eventually pierce through to Paypal's attention here and they may have options available contingent on you being under card/credential testing attack, or they might not. I was not successful in doing so back in the day prior to solving the problem for myself.
Would also recommend building monitoring so you know this is happening in the future before the disputes roll in. Note that those disputes might be from them or from the legitimate users depending on exactly what credentials they have stolen, and in the case they are from legitimate users, you may not have caught all of the fraudulent charges yet. (Mentioning because you said "all of the charges" were disputed.) If I were you I'd try to cast a wider net and pre-emptively refund or review things in the wider net, both because the right thing to do and also because you may be able to head off more disputes later as e.g. people get their monthly statements.