Latest Scams
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| Have you ever questioned: "What are the latest credit card scams?" |
Here are some protection priorities for merchants that are face-
to-face with their customers to completely protect themselves
from FRAUD and charge backs.
to-face with their customers to completely protect themselves
from FRAUD and charge backs.
- 1. The CARD needs to be present during each transaction.
- 2. An imprint of the card needs to be obtained. Most all imprints
today are electronic (swiped through a card reader). If this is not an
option, then the old fashion “Knuckle Buster” manual imprinter is
needed to physically get an imprint of that card.
- 3. You need to get the correct signature that is on that particular
card.
- 4. Goods and Services need to be exchanged as promised. An
example would be taking a broken down vehicle to a mechanic
shop. The shop telling the customer it should take no more than 1
or 2 days and should cost around $600 for the repairs. If the
mechanic shop takes a week without notification or the charge for
repairs grows to $1,500 for the job without consent from the
customer, the probability of the customer getting their funds
returned to them by way of disputing the charge is very great.
For the protection of our merchants, we felt it necessary to keep
you up to date on some of the latest scams. We have listed
below several scams we have seen in hopes of protecting our
valued merchants.
Scam #1
A mechanic shop opened for only 3 months has a young man in his late
teens that brings his car in that needs a complete engine overhaul. He is
told the job will run about $2,500 and will take about 3 days to
complete. The young man asks the owner if has accepts credit cards.
“Yes”, the owner says glad to get the big job that just might keep his
new business afloat. 4 days later the young man comes to pick up the
car. He tells the owner that he is going to pay with his grandmother’s
credit card and has the card # and expiration date written down on a
piece of paper. The skeptical owner says “I am going to need to speak
with your grandmother”. The young customer says “Sure, this is her
phone number she figured you would want to speak with her, she is
home now, please call her.” The owner calls and confirms with the old
lady that this young man is in fact her grandson and she has given him
permission to pay for the repairs. The owner “KEYES IN” the transaction
and sure enough, it is approved. The owner is really happy because he is
out of pocket over $1,500 himself in parts and needs to pay his
mechanic. The young man signs the receipt and drives off with his
repaired car. It was less than a week later the owner of the mechanic
shop gets a charge back letter from his credit card company, the old
lady is disputing the transaction. She says she never was there and didn’
t authorize any transaction at that business. The owner was told by HIS
credit card processor that “Nobody told me I couldn’t key in a
transaction!” The processing company had already pulled the $2,500
back out of his account along with a $25 charge back fee.
Unfortunately, this put this man out of business.
Scam #2
A merchant that owns a chain of cell phone accessory stores across
central Texas with about 30 locations, mostly in malls and are kiosks,
notices that one location had $4,500 from her credit card processing
company. She called her rep and together with the risk department put
the pieces together of an elaborate scheme. It seems one of her
employees purchased a “PRE PAID” visa debit card. The employee made
a purchase of $1.47 the previous month. Then this employee at the end
of his shift , with no supervisor, did a refund of $1,500 on that same
prepaid debit card, then did another $1,500 refund 2 minutes later.
About 3 minutes later, the employee did ANOTHER refund of $1,500
totaling $ 4,500.
The funds were credited to that prepaid debit card in approximately 2
business days. The employee then was able to go to an ATM and
withdraw all the cash off that card. Ultimately the owner was able to
have that employee charged with theft. If there would have been
multiple employees there with no camera or clerk # used for the refund,
the merchant would have never known who committed this crime.
Scam #3
The following is a story taken directly from a merchant.
Some banks are changing the game for merchants who accept credit
cards. With the economy in a slump many credit card processors are
requiring merchants to keep funds in reserve to cover future processing
fees or potential charge backs. We'd heard of this in the past but never
really had an issue with it. Until Now! We recently had some fraud out of
Canada to the tune of $4700 over a few months. Yea we were pissed,
but it was a loss we could deal with. That is until we noticed just after
Memorial Day that we realized we weren't getting our settlements, at
first we thought .. OK it's just after a holiday so there's a delay, but after
a week of no money- I mean NO money coming in we got very
concerned and called Chase Paymentech to see what was going on. Of
course we get transferred all over the place and no one gives us real
answers and then are finally sent over to someone at a totally different
company First Data. Huh? After about 10 phone calls later we finally get
an answer as to what the heck is going on. Basically because of the fraud
and that we actually give credits to customers that make returns, and
because we were doing more business than last year they have decided
to hold back over $15,000 for an undetermined period of months.
WHAT?!?!? Apparently this is not so new news... First Data has
apparently been doing a lot of this lately. FirstData is apparently the
processor for Chase Paymentech. At any time, at the sole discretion of
the bank, the bank has the right to place funds on hold in a non-interest
barring reserve account. Reserve account is to protect the bank
from future losses due to fines, charge backs, etc that may come
through your merchant account. Hold time-frame will be determined by
the bank and is usually for long enough time period to cover future
customer charge backs.
Scam 4 – This is the most common scam we have run across.
The Importance of Knowing Your Credit Card Processor’s Name
April 6th, 2011
This post is about callers impersonating a merchant’s current credit card
processor. The most popular scam using this technique has been around
for a long time, but each year we still see some merchants fall for it. It
works like this: Someone calls the merchant, pretending to be from the
merchant’s credit card processor and asks if they need supplies for the
credit card terminal. They target merchants that have a large number of
transactions and hope that they will speak to someone who is not
familiar with the real processor. If the merchant does need supplies, the
impersonator asks for the type of terminal and the address of where
they should send the supplies. Within a few days, the merchant receives
the supplies, accompanied by an invoice for an inflated price,
sometimes 10 times what the supplies are worth.
Another version of this scam is where someone calls pretending to be
the merchant’s credit card processor and informs the merchant that
they need to do an update to the terminal. What they are really doing is
reprogramming the terminal and results in the merchant processing
through a different credit processing company. The merchant does not
see any difference in processing the daily credit cards but when they get
their monthly statement, it is from a different processor with higher fees.
Both of these scams rely on the merchant not being familiar with the
current processor and the terms of their agreement. These scams can
easily be avoided with a few procedures in place. First, employees
should be aware of the name of the current credit card processing
company and the name of the representative. Next, only certain people
should be authorized by the owner to order supplies or make any
changes to the credit card system. The merchant should also be familiar
with the terms of their current agreement. For example, our company
does not charge for supplies and never randomly calls merchants asking
about supplies so we tell our merchants to call us if they get any
communications by phone, or mail regarding the credit card system.
Scam #5
The following is a common scam being seen by risk management. A
"Customer" enters a business and makes a purchase using a credit card.
The proprietor attempts to process the transaction, but every
authorization attempt is declined. The card-holder tells the merchant he
will contact the card-issuer, via cell phone. The individual allegedly
makes the call into his bank, but in reality, dials the number of an
accomplice. The card-holder hands the phone over to the merchant so
the person on the other line can provide a false authorization number.
The merchant then unknowingly forces the sale through the terminal.
Using an illicit code, due to an invalid authorization being used, such a
transaction will almost certainly be disputed, causing the merchant to
take a total loss on the sale. In order to avoid being victimized in this
manner, merchants should only input codes obtained directly from the
voice authorization center.
you up to date on some of the latest scams. We have listed
below several scams we have seen in hopes of protecting our
valued merchants.
Scam #1
A mechanic shop opened for only 3 months has a young man in his late
teens that brings his car in that needs a complete engine overhaul. He is
told the job will run about $2,500 and will take about 3 days to
complete. The young man asks the owner if has accepts credit cards.
“Yes”, the owner says glad to get the big job that just might keep his
new business afloat. 4 days later the young man comes to pick up the
car. He tells the owner that he is going to pay with his grandmother’s
credit card and has the card # and expiration date written down on a
piece of paper. The skeptical owner says “I am going to need to speak
with your grandmother”. The young customer says “Sure, this is her
phone number she figured you would want to speak with her, she is
home now, please call her.” The owner calls and confirms with the old
lady that this young man is in fact her grandson and she has given him
permission to pay for the repairs. The owner “KEYES IN” the transaction
and sure enough, it is approved. The owner is really happy because he is
out of pocket over $1,500 himself in parts and needs to pay his
mechanic. The young man signs the receipt and drives off with his
repaired car. It was less than a week later the owner of the mechanic
shop gets a charge back letter from his credit card company, the old
lady is disputing the transaction. She says she never was there and didn’
t authorize any transaction at that business. The owner was told by HIS
credit card processor that “Nobody told me I couldn’t key in a
transaction!” The processing company had already pulled the $2,500
back out of his account along with a $25 charge back fee.
Unfortunately, this put this man out of business.
Scam #2
A merchant that owns a chain of cell phone accessory stores across
central Texas with about 30 locations, mostly in malls and are kiosks,
notices that one location had $4,500 from her credit card processing
company. She called her rep and together with the risk department put
the pieces together of an elaborate scheme. It seems one of her
employees purchased a “PRE PAID” visa debit card. The employee made
a purchase of $1.47 the previous month. Then this employee at the end
of his shift , with no supervisor, did a refund of $1,500 on that same
prepaid debit card, then did another $1,500 refund 2 minutes later.
About 3 minutes later, the employee did ANOTHER refund of $1,500
totaling $ 4,500.
The funds were credited to that prepaid debit card in approximately 2
business days. The employee then was able to go to an ATM and
withdraw all the cash off that card. Ultimately the owner was able to
have that employee charged with theft. If there would have been
multiple employees there with no camera or clerk # used for the refund,
the merchant would have never known who committed this crime.
Scam #3
The following is a story taken directly from a merchant.
Some banks are changing the game for merchants who accept credit
cards. With the economy in a slump many credit card processors are
requiring merchants to keep funds in reserve to cover future processing
fees or potential charge backs. We'd heard of this in the past but never
really had an issue with it. Until Now! We recently had some fraud out of
Canada to the tune of $4700 over a few months. Yea we were pissed,
but it was a loss we could deal with. That is until we noticed just after
Memorial Day that we realized we weren't getting our settlements, at
first we thought .. OK it's just after a holiday so there's a delay, but after
a week of no money- I mean NO money coming in we got very
concerned and called Chase Paymentech to see what was going on. Of
course we get transferred all over the place and no one gives us real
answers and then are finally sent over to someone at a totally different
company First Data. Huh? After about 10 phone calls later we finally get
an answer as to what the heck is going on. Basically because of the fraud
and that we actually give credits to customers that make returns, and
because we were doing more business than last year they have decided
to hold back over $15,000 for an undetermined period of months.
WHAT?!?!? Apparently this is not so new news... First Data has
apparently been doing a lot of this lately. FirstData is apparently the
processor for Chase Paymentech. At any time, at the sole discretion of
the bank, the bank has the right to place funds on hold in a non-interest
barring reserve account. Reserve account is to protect the bank
from future losses due to fines, charge backs, etc that may come
through your merchant account. Hold time-frame will be determined by
the bank and is usually for long enough time period to cover future
customer charge backs.
Scam 4 – This is the most common scam we have run across.
The Importance of Knowing Your Credit Card Processor’s Name
April 6th, 2011
This post is about callers impersonating a merchant’s current credit card
processor. The most popular scam using this technique has been around
for a long time, but each year we still see some merchants fall for it. It
works like this: Someone calls the merchant, pretending to be from the
merchant’s credit card processor and asks if they need supplies for the
credit card terminal. They target merchants that have a large number of
transactions and hope that they will speak to someone who is not
familiar with the real processor. If the merchant does need supplies, the
impersonator asks for the type of terminal and the address of where
they should send the supplies. Within a few days, the merchant receives
the supplies, accompanied by an invoice for an inflated price,
sometimes 10 times what the supplies are worth.
Another version of this scam is where someone calls pretending to be
the merchant’s credit card processor and informs the merchant that
they need to do an update to the terminal. What they are really doing is
reprogramming the terminal and results in the merchant processing
through a different credit processing company. The merchant does not
see any difference in processing the daily credit cards but when they get
their monthly statement, it is from a different processor with higher fees.
Both of these scams rely on the merchant not being familiar with the
current processor and the terms of their agreement. These scams can
easily be avoided with a few procedures in place. First, employees
should be aware of the name of the current credit card processing
company and the name of the representative. Next, only certain people
should be authorized by the owner to order supplies or make any
changes to the credit card system. The merchant should also be familiar
with the terms of their current agreement. For example, our company
does not charge for supplies and never randomly calls merchants asking
about supplies so we tell our merchants to call us if they get any
communications by phone, or mail regarding the credit card system.
Scam #5
The following is a common scam being seen by risk management. A
"Customer" enters a business and makes a purchase using a credit card.
The proprietor attempts to process the transaction, but every
authorization attempt is declined. The card-holder tells the merchant he
will contact the card-issuer, via cell phone. The individual allegedly
makes the call into his bank, but in reality, dials the number of an
accomplice. The card-holder hands the phone over to the merchant so
the person on the other line can provide a false authorization number.
The merchant then unknowingly forces the sale through the terminal.
Using an illicit code, due to an invalid authorization being used, such a
transaction will almost certainly be disputed, causing the merchant to
take a total loss on the sale. In order to avoid being victimized in this
manner, merchants should only input codes obtained directly from the
voice authorization center.
|
| Phone & Fax: 1-855-55SWIPE (1-855-557-9473) Fax: 979-530-9533 (Toll Free) Email: office@brazosvalleymerchants.com |
