I just received notification from our merchant service provider that there is a new scheme to defraud merchants and cardholders. Read about it…
Avoid “Cash Back” Fraud
A new scheme to defraud merchants and cardholders has been identified as “cash back” fraud. The fraudsters are targeting gift and flower shops but other business types have been and could be affected. The transaction amounts identified in this scheme have been ranging $2000.00 and $4000.00. As Mother’s Day approaches we expect to see increased reports of this type of fraud.
This is how the scheme works…first, typically a gift or flower shop will receive a faxed, emailed or even “relayed” calling used by the hearing impaired.
Next, the “cardholder” ordering the flowers or gift will ask for “cash back” with their payment card order. They ask that this “cash back” be used to wrap the flowers or gift being purchased. The victim merchant will be asked to wrap the gift in $10, $20, $50, or even $100 bills as a special “surprise”. The victim merchant may even be asked to send cash via Western Union or by bank wire to another party.
The “cardholder” pays for this order by stolen or compromised card numbers and may even request the victim merchant to accept more than one card for payment. “Ship to” address is provided and in some variations the fraudster may advise the merchant that someone will be coming in to pick up the order.
If you find your business in a similar situation, or any one that is unusual or suspicious, contact the merchant service department. You will be advised how to handle the situation accordingly. Remember it is against the payment card association rules to provide cash back on non-pin debit transactions.
For more information about fraud prevention visit the Visa website at http://USA.Visa.com/Merchants/, click on card acceptance guide or Mastercard at http://www.Mastercard.com/US/Gateway.html, click on Mastercard worldwide rules to learn more about card acceptance.
—Intuit Payment Solutions
Have you, or someone you know, run into a situation like this before? Post your comments here.
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