FRAUDULENT Credit Card Transaction SCAM

Ginger HollowellScams Against Merchants, Scams of Credit Card Processing SalesmanLeave a Comment

FRAUDULANT Credit Card Transaction SCAM

Watch Out for This FRAUDULENT Credit Card Transaction SCAM!

I just heard from one of my customers who got an email and text from someone who wanted to use their credit card for a HUGE SALE!  I am changing the name of the merchant and proprietor, but wanted to let you all know about this SCAM!  We have heard this same story several times over the years since we got into the credit card processing business in 2000.  It is worth repeating every so often in order to protect others from a devastating situation.

Mary owns a jewelry story.  She got a request from someone out of state who wanted to buy a large diamond for his wife’s 25th anniversary!  He wanted to avoid sales tax, and he found Mary online.  He wanted to pay by credit card and have Mary ship the diamond.  He didn’t want her to send the diamond to the address associated with the credit card, but ship it to a family member’s house so the surprise would not be spoiled. Sounds plausible, doesn’t it?

WARNING SIGN 1:  A huge sale!  Whenever a sale is so big that you get emotionally excited about the sale, it is time to take a deep breath and pause.  If a bird quacks like a duck and swims like a duck, guess what?  It is not always a duck.  It is the same situation here.  Remember that you and every other person on the planet who has a credit card, has up to 6 months to charge a transaction back. Credit cards feel like cash because day in and out, you take cards for payment and the money shows up in your bank account the next day.  But credit cards are not cash.  They are credit! You are issuing your customer credit! So first and foremost, be careful about an exceptionally large sales.

WARNING SIGN 2:  Do you know this customer?  Have you done business with this person before? Have you met the person  face to face?  Have you verified his driver’s license that it matches the name on the card.  Asking a customer if you can see their driver’s license is one way to prevent fraud during an instore transaction.  If someone contacts you by phone or from a website, you can still ask them to send over a copy of their driver’s license.

WARNING SIGN 3:  Does the customer’s address match the address associated with the credit card?  Sometimes it does not match for a legitimate reason.  Perhaps they just moved to a new house.  But when the address does not match, it should give you pause to consider that the transaction could be fraudulent.  Ask more questions and consider whether  warning sign 1 and  2 also apply.

WARNING SIGN 4:  Is the customer taking the product with him from your brick and mortar shop or is the customer asking you to ship the product? Have you had a chance to size up the individual who stands in front of you or are you taking an order over the phone or internet? The risk is always more  when the payment is taken over the telephone or over  an e-commerce site instead of swiped in person.

WARNING SIGN 5:  Is the customer asking you to ship the product to the address associated with the credit card or to a different address?  When the shipping address does not match the address associated with the credit card, you should have grave concern about the validity of the transaction and sale.

Mary’s scenario should send out loud gongs deafening your ears!  But I have talked to many Marys and Joes who contacted me because they are just a bit nervous.  They know something is not right in their gut.  However, their mouth is salivating like with the taste of the biggest, most tender steak that they have ever had the pleasure of devouring! They are hoping to get a validation from me, their credit card processing company, that all is well as long as the card is not declined.  But when a card is stolen, there is not a decline because there is plenty of credit still available on the card. So people, be careful.  Check the warning signs and be cautious.  If you let the huge sale product go out the door or see it drive away in the Fed Ex or UPS truck, you could end up with the double jeopardy of losing the product and the money.