Hoverboard Fraud Is Massive And It’s Getting Worse During The Holidays

Hoverboard for sale

Right now is an awful time to be in the hoverboard selling business.

Sellers of the popular two-wheeled, self-balancing boards, are being taken for thousands and sometimes hundreds of thousands of dollars in fraudulent charges.

BuzzFeed News has published a report involving numerous scams, based on documents apparently leaked from payment processor Stripe.

“Chargeback” – disputes over payments from cardholders, are sometimes totaling 75% of sales for merchants of the popular Christmas item.

The average number of chargebacks on Stripe is reportedly just 1% while some hoverboard merchants are seeing 75% of their sales attributed to chargebacks.

American rapper Soulja Boy is one high-profile victim of the theft practice. His side business sells Hoverboards using Stripe to process payments. At one point, he reportedly had a negative balance of nearly $175,000 (£115,00). “The vast majority of your negative balance is due to fraud,” support staff at Stripe reportedly told him.

In one case, hoverboard vendor IO Hawk had a reported $900,000 negative balance. Stripe’s documents call it “one of our largest losses ever.”

In the case of IO Hawk, Stripe said the “Merchant was not suited to run a business of this size and with such a risky product.”

 

If that isn’t bad enough, cheap knock-offs of the popular hoverboards are regularly breaking and in some cases, catching on fire.