Common Fraud Schemes
The Card Holder Bully
In the "Card Holder Bully" scam the fraudster will bring goods to the counter and attempt to pay with a credit or debit card. The card may appear to be perfectly valid but when your cashier swipes or key-enters the card, it will return declined. At this point the fraudster may demand that the card is indeed valid and may even offer a logical explanation as to why the card was declined. The fraudster will then take the card back and pretend to call the phone number listed on the back of the card. They may even ask to use the store's phone to make the call. Instead of the bank the call will connect to the fraudsters partner in crime who will ask to speak to the clerk. The partner will explain how there was a mistake and even may provide instructions for the clerk to enter an "off-line" sale using a fake authorization code. At this point, the fraudster will walk away with the goods. In this scam, once the batch has been settled the sale will be rejected and your business will not be funded.
How To Prevent This Fraud
This type of fraud is one of the more common and is particularly effective with untrained staff. Because this fraud only works if the fraudster convinces your cashier to cooperate, the best defense is training. Ensure that your staff knows to ONLY call the number provided by PAYMENT LOGISTICS to obtain authorizations and not to accept any other number even if it's printed on the back of a credit card. Additionally, if a card is returned as "declined" it is always best to ask for another form of payment. If a customer insists the card is good, contact Payment Logistics at 888.624.3687 for further instructions.
Delivery Only Purchases
While internet and mail order sales can greatly help a company increase their customer base - it also increases exposure to fraudulent credit card transactions. A common scam will involve a fraudster posing as a customer making a purchase for one amount (i.e. $1000) and asking you to charge their credit card for a larger amount(i.e. $1500). They will tell you the additional funds ($500 in this example) are there to cover the delivery costs for their shipping carrier which does not accept credit cards. Most victims of this scam often don't find out the purchase was fraudulent until days after shipping the goods to the fraudster. This leaves your business out the goods and the cash!
How To Prevent This Fraud
First, remember, if a transaction seems to good to be true, it probably is. If a customer wishes to use their own delivery carrier but wants to pay you for the shipping it is almost always fraud. If you're ever unsure about a transaction, contact Payment Logistics directly at 888.624.3687 and our staff of trained professionals will quickly ascertain the legitimacy of a particular transaction.
The Tag Swap
Though the Tag Swap is not a credit card specific fraud, it is still one of the common holiday scams out there. In this scam a fraudster will take the price tag or barcode from a relatively cheap item and place it on a much more expensive item. The idea is to have the cashier charge the fraudster for the cheaper item.
How To Prevent This Fraud
Training is again your biggest asset here. Ensure that your employees check the item that rings up on the register and the item they are scanning. Any differences can be politely explained and remedied before the fraudster has a chance to even raise an objection. Obviously with this type of scam, one can never be 100% sure if the customer at the register is actually a fraudster or if they inadvertently picked up a miscoded item - erring on the side of caution is probably your best bet.
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In the "Card Holder Bully" scam the fraudster will bring goods to the counter and attempt to pay with a credit or debit card. The card may appear to be perfectly valid but when your cashier swipes or key-enters the card, it will return declined. At this point the fraudster may demand that the card is indeed valid and may even offer a logical explanation as to why the card was declined. The fraudster will then take the card back and pretend to call the phone number listed on the back of the card. They may even ask to use the store's phone to make the call. Instead of the bank the call will connect to the fraudsters partner in crime who will ask to speak to the clerk. The partner will explain how there was a mistake and even may provide instructions for the clerk to enter an "off-line" sale using a fake authorization code. At this point, the fraudster will walk away with the goods. In this scam, once the batch has been settled the sale will be rejected and your business will not be funded.
How To Prevent This Fraud
This type of fraud is one of the more common and is particularly effective with untrained staff. Because this fraud only works if the fraudster convinces your cashier to cooperate, the best defense is training. Ensure that your staff knows to ONLY call the number provided by PAYMENT LOGISTICS to obtain authorizations and not to accept any other number even if it's printed on the back of a credit card. Additionally, if a card is returned as "declined" it is always best to ask for another form of payment. If a customer insists the card is good, contact Payment Logistics at 888.624.3687 for further instructions.
Delivery Only Purchases
While internet and mail order sales can greatly help a company increase their customer base - it also increases exposure to fraudulent credit card transactions. A common scam will involve a fraudster posing as a customer making a purchase for one amount (i.e. $1000) and asking you to charge their credit card for a larger amount(i.e. $1500). They will tell you the additional funds ($500 in this example) are there to cover the delivery costs for their shipping carrier which does not accept credit cards. Most victims of this scam often don't find out the purchase was fraudulent until days after shipping the goods to the fraudster. This leaves your business out the goods and the cash!
How To Prevent This Fraud
First, remember, if a transaction seems to good to be true, it probably is. If a customer wishes to use their own delivery carrier but wants to pay you for the shipping it is almost always fraud. If you're ever unsure about a transaction, contact Payment Logistics directly at 888.624.3687 and our staff of trained professionals will quickly ascertain the legitimacy of a particular transaction.
The Tag Swap
Though the Tag Swap is not a credit card specific fraud, it is still one of the common holiday scams out there. In this scam a fraudster will take the price tag or barcode from a relatively cheap item and place it on a much more expensive item. The idea is to have the cashier charge the fraudster for the cheaper item.
How To Prevent This Fraud
Training is again your biggest asset here. Ensure that your employees check the item that rings up on the register and the item they are scanning. Any differences can be politely explained and remedied before the fraudster has a chance to even raise an objection. Obviously with this type of scam, one can never be 100% sure if the customer at the register is actually a fraudster or if they inadvertently picked up a miscoded item - erring on the side of caution is probably your best bet.
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