Credit Card Fraud Scams

We have to be aware of the current credit card fraud scams that are being practiced by today’s criminals so that we can avoid being victimized. Here are some current tips.

• Authorization approval does not mean that the merchant is guaranteed payment. Approval only indicates that at the time the approval was issued, the card hasn’t been reported stolen or lost, and that the card credit limit has not been exceeded. If someone else is using the credit card number illegally, the cardholder has a right to dispute the “approved” charges.
• One of the latest scams involves a “customer” whose credit card gets declined when he or she attempts to make a purchase. The scam artist then picks up a cell phone, pretending to notify the bank about the jewelry purchase. Next, the person hands the cell phone over to the jewelry salesperson, who is greeted by a slick-sounding “bank official” who asks the normal questions before giving the salesperson the authorization to proceed. The salesperson takes the card and does what is called a “forced sale,” swiping the card and punching in the authorization code. A few weeks later, a jeweler gets notice of a chargeback. What was the mistake? Obtaining the authorization from the person on the cell phone rather than through the store’s normal authorization center. The solution? Always call your own authorization center.
• Never use the phone number on the back of the card to call the issuing bank, as this could be a fake number as well. Again, always call your center first. If you need to talk to the issuing bank, get the number from your call center.
• Always bear in mind that in fraud cases, you must prove that a credit card was in your hands. If you get a clean magnetic “swipe,” you have proof, because your machine “knows” you had the card. But, if you don’t get a clean swipe and have to use the credit card machine’s keypad to manually enter a credit card number, be aware that you are at risk. If you can’t get a clean swipe, you need to take an imprint of the credit card using an old-style imprinting machine.
• Never repeat the swipe if the card is declined. Even if it gets accepted on the next swipe, the credit card company can decline to pay us. You have to take their first response. If you want to try for a lower amount, call the authorization center and explain the situation and get the authorization code from them.
• Always call the card center if you get a referral message on the machine. Never repeat the swipe if you get a referral message.

Ways to avoid taking a fraudulent credit card:

• Ask for and check other identification, such as a driver’s license or other photo ID. Check to see if the ID has been altered in any way as a person trying to use a stolen credit card may also have stolen or fake ID.
• Always check their driver’s license with the RETAIL ID app on the store iPhones. This will tell you whether the driver’s license is in the DMV’s system, whether ID is verified (green), ID is expired or missing information (yellow), or just not in their system (red), which would indicate ID not verified, and most likely fake.
• Examine the signature on the card. If the signature on the credit card is smeared, it could be that the credit card is stolen and the person has changed the signature to his or her own.
• Compare signatures. Besides comparing the signature on the credit card with the person’s signature on the credit card slip, compare the signatures as well to those on any other ID presented.
• Check the security features of the credit card.
  1. Have another look at the card’s signature panel. It should show a repetitive color design of the MasterCard or Visa name. Altered signature panels (those that are discolored, glued, painted, erased, or covered with white tape) are an indication of credit card fraud.
  2. Check the credit card’s embossing. “Ghost images” of other numbers behind the embossing are a tip-off that the card has been re-embossed. The hologram may be damaged. (The holograms on credit cards that have not been tampered with will show clear, three-dimensional images that appear to move when the card is tilted.)
• Check the presented card with recent lists of stolen and invalid credit card numbers.
• BIN CHECK: The first 6 digits of the credit card are called the Bank Identification Number (BIN). You can determine if the credit card holder and the issuing bank for the credit card are located in the same country. Legitimate users sometimes use a credit card from another country. You can enter the BIN of a credit card number at http://www.bindatabase.net/search.php. The site provides the bank name, card type, and a 3 character code for the country.

Some credit card fraud criminals will be nervous and edgy, an obvious giveaway. You should also be wary of credit card customers who do any of the following :

• Pull a credit card out of a pocket rather than a wallet or purse.
• Purchase an unusual amount of expensive items.
• Have a newly valid credit card and purchase expensive items.
• Purchase items without trying them on.
• Purchase an unusual variety of items with a wide variety of value.
• Ask what the floor limit is – the limit at which the charge must be authorized. That’s rather old-school but could still be asked. We have a zero floor limit, meaning that every charge gets authorized.
• Try to hurry you up near closing time.
• Try to distract you during checkout with special requests or additional purchases so they can grab the merchant’s copy of the sales draft – leaving you with no protection against chargebacks. Don’t ever leave the customer alone with the merchant’s copy of the sales draft!
• Tell you not to bother swiping their card (claiming the card is damaged or some such reason). Explain that you always have to swipe.

In addition, customers who make a scene while checking out may be trying to intimidate cashiers so that they don’t follow the usual checkout procedures – giving the criminal a better chance of getting away with credit card fraud.