During Fraud Prevention Month, the Edmonton Police Service (EPS) is warning businesses not to take credit cards over the telephone after a credit card fraud reportedly made its rounds at auto shops.
“Sadly, when the fraud didn’t work at one shop, they just went down the road,” says Det. Linda Herczeg with the EPS Economic Crimes Section. “This is a cautionary tale for retailers to only accept credit cards from people standing in front of you, and only when the name on the card matches picture identification.”
Just prior to Family Day long weekend in February 2016, Lloyd Darius, the owner of Award Automotive in Edmonton, was contacted over the telephone by an unknown man who needed to purchase 52 specialized off-road truck tires for an oilfield company. The man claimed he needed the tires as soon as possible because most businesses would be closed over the long weekend, and he would provide a credit card number over the phone for the purchase and send a courier to pick up the tires.
Any business would have jumped at the opportunity, as the order required very little effort and would be worth well over $20,000. But Lloyd thought it was unusual, so he decided to do his own research.
Lloyd called the local tire supplier and coincidently there were exactly 52 of those tires in stock. He wondered why any business would use a credit card for such a bulk purchase, so he called the alleged company to check. The company did exist, but the credit card number did not.
When the man called back about his order, Lloyd confronted him about the credit card, and the man said Lloyd must have written the number down wrong. The caller continued to pressure Lloyd and wanted to send a courier ASAP to pick-up the tires, however, Lloyd declined. The caller said, “If you don’t want our business, we’ll take it elsewhere,” and hung up.
After the long weekend, Lloyd spoke to his tire supplier and learned that another shop in the area purchased those same tires for a customer, but was on the hook for the cost of the tires because the credit card was stolen.
“It’s possible for a business to absorb a smaller fraud, but a loss of $20,000 to $30,000 in one day could bankrupt your business,” says Lloyd. “You might think you’ve won the lottery with the sale, but if it’s too good to be true, it’s probably a scam.”
The EPS investigated eight cases of fraudulent credit cards being used for bulk tire purchases in 2016, with losses to retailers totalling $70,485. One local shop lost $36,000 on one purchase, and another shop was hit twice the same month for a total of $8,360.
Police continue to investigate the crimes and believe the same individuals may be involved with similar tire scams across Alberta, including 13 fraudulent purchases in Boyle worth a total of $141,000 in 2016.
"This type of fraud, usually known as card-not-present, cost Canadians over half a billion dollars in 2015, a number that has been steadily climbing and is expected to continue," says Const. Sean Milne with the RCMP Serious and Organized Crime Financial Integrity Unit.
Across Canada, it is believed that more than half of small businesses have been targeted by credit card fraud. Here in Edmonton, credit card fraud is up a staggering 50 per cent from 664 reported incidents in 2015 to 995 in 2016.
Det. Herczeg adds, “Fraudsters can attain lost or stolen credit cards, skim legitimate credit cards, intercept credit cards in the mail, and even acquire new credit cards through identity theft. There are many ways you can fall prey to credit card fraud, but with some due diligence, businesses can avoid financial losses and help police catch the thieves.”
Reduce the risk of credit card fraud:
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Do not take credit card payments over the phone. Opt for chip cards with PIN whenever possible.
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Ask for customer identification to verify the credit card.
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Be cautious of multiple transactions on the same card or multiple card use.
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Watch out for orders of big ticket items, orders of more than one of the same item, or larger than normal orders.
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Be alert to long-distance orders, especially if that is not common for your business.
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Keep payment terminals secured. Install video cameras at your point-of-purchase and pick-up locations.
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Do not be afraid to stop the transaction and alert your supervisor if you suspect fraud.
For additional fraud and crime prevention tips, please visit http://ift.tt/1c2fjiw. A variety of fraud awareness resources are available to the public from Service Alberta, the Competition Bureau, the Canadian Anti-Fraud Centre, and Scam Detector.
The Edmonton Police Service reminds citizens that fraud prevention is ongoing – we need to recognize it, report it, and stop it. If you are the victim of a fraud, or have knowledge of an economic crime, please contact the EPS at 780-423-4567 or #377 from a mobile phone. Anonymous information can be submitted to Crime Stoppers at 1-800-222-8477 or at http://ift.tt/1az8Eve.
from Media Releases http://ift.tt/2njBoq1
