How to Protect Your Dumpster Rental Business from Scams

Hacker and Dark Web Overview

Michael: So, if you type in hacker into Google, this is what you get. There’s a thing called the dark web. Raise a show of hands. Anyone who’s come across this or knows what that means? Never know what it means? Okay. Yeah, busted. Teach us.

Basically, this is a place where people who want to do illegal stuff can go. It’s an internet that you need special tools to access. You can’t just go to Google and end up in the dark web. You need different technologies to go there. But essentially, you can go there and if you wanted to buy a list of 10,000 stolen credit card numbers, you could do that. I have every confidence my social security number, my birthday, my 6’6″ height, my credit card number, all that stuff is out there. If someone wanted to buy it, they could.

So, what people do is buy these lists of credit cards and then test them out on different websites. They’ll find sites that have limited security and you can write a robot to try these 10,000 cards on this website and see if they work. Most modern websites have security protocols in place like we do at Docket that prevents this from happening at scale. But even so, this is what’s going on.

About 18 months ago, somebody came across dumpster rental as a new industry and we saw from the data that these kinds of transactions spiked.

Why Dumpster Rentals are Targeted

Why are people looking at dumpster rental and saying it’s an attractive place to do this?

A couple things. Your first question: online booking and payment. You can’t take a list of stolen credit card data and go into a Walmart and try to use that stuff. There’s nowhere for you to punch that information in. The fact that many dumpster rental transactions are done with online booking and payment is the first thing that these hackers look for.

The second thing is big ticket transactions. For them to write a script and go through all this effort to steal people’s money, they want to do that for a $375-$700 transaction, not for a $12 t-shirt. So, dumpster rental being a big-ticket item is another factor.

Third and fourth are kind of related. Time-sensitive needs. People call and need a dumpster urgently. For some reason, people forget they’re knocking out their basement wall and need a dumpster to throw all that stuff away today or tomorrow. So, when someone calls and needs a dumpster today or tomorrow, you’re not surprised by that; it’s part of your day-to-day thing. If most of your transactions were weeks out, planned out, then you might think differently about that request that comes in out of the blue for a dumpster today or tomorrow. But because this happens every day, you’re used to it.

And then finally, the competitive dynamics. Dumpster rental is a competitive industry. You probably have 5, 10, 20 competitors in your area. You’re all trying to be easy to do business with. You want to win that lead when it comes in. So, you’re potentially asking for fewer things than you would in an ideal world to make sure everything is super safe and secure. So, driver’s license images to match up to billing address information, sign contracts before you’ll actually put a dumpster out, all those things would be ideal to make sure this never happened. But because you’re trying to win business and because it’s a competitive market, all those plus online booking and higher tickets make this an industry that’s worthwhile targeting from a hacker’s and bad actors’ perspective.

The Scamming Process

I just quickly went on to some of the Facebook threads and saw these are posts of people who either have gotten scammed or came across these scams and we’re just trying to make other people aware of this stuff.

What does this look like? Some of us are based in Denver. I live in Denver. I went on to Facebook Marketplace and typed in dumpster rental. Look at all these listings. Someone is running a dumpster for $4. This one’s $44. This one says same day for their $1 dumpster chair. There we go. Scammers essentially put these listings up, and this is where this whole thing starts.

Here’s the flow. The first thing is the fake listing. I’m going to put this up, and then somebody who needs a dumpster is in step two. They don’t know what a normal dumpster should cost. Maybe they have gone to Google, found legit haulers, seen what a price for a 7-day rental is, and they’re like, “Wow, okay. I had no idea it was going to be three, five, or $700 to have a dumpster for a week.” So, they go looking for a deal and they find themselves on Facebook Marketplace and find the $1 listing. They give it a shot. They respond to that ad and get in touch with the scammer. The scammer says, “Hey, great. It’s not going to be a dollar. It’s going to be $70 for you to get a dumpster bar.” They’re like, “Great. I saw all these other people in Denver for $400. Cool. Seventy bucks sounds awesome.” The scammer will ask to get paid via Venmo, Zelle, or Cash App. The reason for that is because that transaction, you can’t charge back. The money goes and it’s gone at that point.

Once that scammer gets paid, they effectively act as a broker at that point. They then contact a legit hauler, one of you, urgently say, “Hey, I need a dumpster. I need it today or tomorrow.” Oftentimes it’s a weird call; they can’t answer a lot of the details around where the dumpster should go or what size they need. That broker is just trying to get to the next step, which is they find a legit hauler to drop a dumpster off where that person who initiated the scam needs it essentially. Delivery day comes, the person who contacted the Facebook ad poster gets the dumpster delivered. Let’s say they needed it for tomorrow. It’s Tuesday, rolls around. Cool. Dumpster shows up. Legitimate company. You drop the dumpster off, get your paperwork signed, leave. Everyone thinks everything legitimate is happening. There’s been a stolen card that’s been used to book a dumpster on your website. The person who needed the dumpster got the dumpster.

A week later, you pick up the can and head home, and everyone thinks this is all above board and working. Then a week later, the cardholder sees on their credit card statement, “Okay, American Dumpster. I didn’t book a dumpster. What happened here?” So, they initiate the chargeback. Now this very confusing process unwinds where the hauler receives a chargeback. They are confused because everything seems legitimate and above board. They contact the customer who they dropped the dumpster off at. Maybe they drive to that person’s house and they’re like, “Hey, why are you charging this back?” That person is confused because they didn’t initiate a chargeback at all. This is how this scam works.

Spotting and Preventing Scams

How do you spot these things when they come in?

First, an out of area phone number. I grew up in Florida. 305 and 786 are the area codes that everyone in Florida has. If I got a call from a 917 number which is from New York, I’m going to be a little skeptical. Why does someone from New York need a dumpster in Florida?

Same with someone who needs a dumpster in Florida and their billing address is out of state, New York, anywhere that’s not Florida. That’s another red flag. Urgency and this confusing order process sort of go together. If someone is indiscriminate around whatever price you put them, they don’t have any push back on it. If you ask them where they want the dumpster and they say they don’t care, I’ve never met a homeowner who doesn’t care where the dumpster goes. They’re probably going to be very specific with where they want it. Watch out for the driveway, watch out for the tree, leave it here. If the person is just trying to get through that transaction, probably another red flag to look out for.

Your systems can really help here. If you get an IP address order and the IP address happens to be from Puerto Rico or somewhere out of the US, it’s another red flag. Finally, multiple transactions. Docket will turn these off after a certain point, but if three bad cards are used, the transaction could go through. If a hundred bad ones are used, it’s not going to go through.

How can you prevent these things and once they get started, what do you do? Some of these things are going to sound very obvious, but these are just the best practices. There are some chargebacks you just can’t win like fraudulent ones, but doing these six things will help.

The first one is being very transparent around what you charge for and do this in as many places as possible. All of your refund, cancellation, and billing policies, put them on your website, put them on your estimate, put it in your terms and conditions. All those things will help when somebody submits a transaction. Hopefully, it’ll clear things up in the first place. Ultimately, if someone does file a dispute, it can help you say, “Hey, we alerted this customer three different times. Here are the three different emails that we sent them with the billing information. We should win this transaction.”

Clear billing descriptors. Some of you might have a legal entity and then a DBA name that is something else. Making something up, let’s say my legal entity was Prestige Worldwide and my DBA was Mike’s Dumpster Company. If my credit card transactions say Prestige Worldwide, I might get a lot of customers who are disputing those things because they have no idea what that is. This is something you can actually test. If either your DBA or your legal entity name is confusing to people, if it’s not very clear what it is that you’re charging them for, this is actually one easy win you can get by making sure that transactions on credit card statements show the right thing.

Responsive support. Some people ultimately go the chargeback route because they had some service issue, they had some customer support need, they reached out to your team and didn’t get a response period or they didn’t get the response that they wanted. Just being responsive here will help. Hopefully, you figure things out on a business-to-business level instead of someone just going the chargeback route.

The fraud stuff, we talked about it. We have a fraud red flag checklist that we’ll leave with you if you want to take home.

Keeping detailed records. Again, this is not a prevention mechanism. This is a winning mechanism, driving your percentage of disputes up from 44% as close to 100% as possible. Be methodical around all the communications. Make sure if it’s done via email you can call that step back. Taking pictures of proof of service is a best practice. If you can prove the dumpster was delivered the day it was said it would be, it was empty, now it’s full, you’re taking it away to the landfill, this is what’s going to justify the overage or disposal fees. Submitting all these in an evidence request package really helps your case.

Finally, respond to chargebacks quickly. You only have 30 days to respond to these things when they come in. If you’re 31 days, you’re toast and they’re going to debit the money from your account. You can’t follow up after the fact.

Resources

We have a new customer checklist on the left and a fraud red flag checklist on the right. We’ll email these to everybody. If you’re training your teams, if you’re having chargeback problems, $10,000 in a month, that’s a lot. If you have more than one-third of your transactions getting charged back, these are some things to think about. Our team is also happy to chat with you, review your data, and see if there’s anything we can do to help.

FAQ

What makes dumpster rentals attractive to hackers?

Dumpster rentals are attractive to hackers due to their online booking processes, big-ticket transactions, time-sensitive needs, and competitive dynamics. These factors create vulnerabilities that scammers exploit.

How do scammers use fake listings in dumpster rental scams?

Scammers post fake listings on platforms like Facebook Marketplace, offering dumpsters at extremely low prices. Once contacted, they charge unsuspecting customers via non-refundable methods like Venmo and then arrange for a legitimate hauler to deliver the dumpster.

What are common red flags for spotting dumpster rental scams?

Common red flags include out-of-area phone numbers, urgency in order processing, indiscriminate pricing acceptance, and mismatched billing addresses. These indicators help identify potential fraudulent activities.

How can dumpster rental companies prevent chargebacks?

Companies can prevent chargebacks by being transparent with charges, using clear billing descriptors, providing responsive support, keeping detailed records, and promptly responding to chargebacks within the 30-day window.

What resources are available to combat dumpster rental fraud?

Resources include a fraud red flag checklist and a new customer checklist, which can be shared with teams to mitigate chargeback problems and fraudulent transactions.