The Lee County Sheriff's Office Fraud Line recently received a call from a local business owner who reported he had been scammed out of thousands of dollars by unknowingly accepting fraudulent credit cards through his virtual online merchant credit card account. Below is how the scam unfolded:
The scammer first contacted the business owner through e-mail requesting to purchase a large amount of product needed for a construction project taking place outside of the United States. They communicated by both telephone and e-mail and eventually came to an agreement on price. The scammer purchased the
product and paid for the shipping fees using several different credit cards. The owner used his virtual credit card account to process the information, and it appeared that the transactions were approved. Soon after, the victim was advised by the scammer that the "shipper" would be paid out of the monies given to the victim using the fraudulent credit cards and was instructed to transfer monies from his bank account to
the "shippers" bank account. The victim unknowingly wired thousands of dollars to a very clever thief before realizing he had been scammed.
It appears that the business owner followed all the right procedures; however the liability falls on the merchant for a "card not present" sale. Merchants must perform additional checks even after a credit card processor or registration service approves an order. Ultimately it is up to the merchant to protect
themselves against credit card fraud. Using a combination of the following methods may help keep you from becoming a victim:
International Orders: The merchant must weigh the financial benefits of accepting international orders against the possibility of fraud. Some countries have very bad reputations for fraud. Your bank or credit card processor can provide a list of high-risk countries.
Processing Orders: The merchant should have a policy of not shipping any order, including "shipper" fees until the charge can be verified by additional checks.
Call the Card Issuing Bank: When you call the card-issuing bank, have your merchant number, your phone number, and the customer's full name, address and phone number ready. You can ask the card-issuing bank to make a courtesy call to your customer to verify the charge.
Pattern Detection: Check if multiple orders are placed shipping to the same address but different credit cards were used. Check orders for an unusually high quantity of a single item. Thieves may have access to several stolen card numbers.
The Risk Factor: Be careful about orders that are outside of the "norm". Look for indicators such as a request for a "rushed or urgent" shipment, large quantities of a product from a company or individual that can't be verified, advanced or overpayment by a customer who then requests monies be sent back via Western Union or Moneygram.