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Credit scam making rounds
No retailer can afford to lose thousands of dollars right now to a couple of matchstick men.
A Florida home furnishings retailer, who asked not to be named, reported a scam to me last week that has apparently snared a few stores recently. It cost his store thousands of dollars and has been targeting upper-medium-priced to high-end stores.
It’s not a new scam, from what little research I can find on the Internet, but I can see how it might be easy to get away with, even with an experienced salesperson. The store owner said his clerk who fell victim to the scam has been with his store for him for 15 years.
Here’s how the ploy worked:
The ringleader came into the store to scope it out. Later, he came back with a friend, then left. The following day, he came back with another couple and said they were thinking of buying a certain furniture group.
The customer paid with a credit card, which was declined. The customer then told the clerk he would call his bank, took the card, flipped it over and made a call on his cell phone.
But the person on the other end was only pretending to be from a credit department. This phony bank employee gave an approval number and asked the store to push the purchase through.
An approval number is manually entered and is accepted by the credit card company - which is the flaw the cons are working.
From what I understand of how this works, an approval code really isn’t anything special on a credit card. I didn’t know this before, but the approval code just means the card is active.
The store owner said that the customer “put my employee on the phone with this person and they spoke the talk perfectly. Everything you would ask when talking to merchant services.”
“He was like, ‘Go ahead and force the thing through with this code.’ He’s got someone on other phone doing this thing, saying whatever, giving people credit approval codes. That’s how it’s done,” the store owner said.
When deliveries are made, the phony customers meet the truck at the arranged address, and tell the driver to follow them to another location to drop off the furniture.
This happened twice to this store owner. He suspects that the head scam artist might have been affiliated with the fraud department of a bank and knows how the process works.
The store owner said he has been able to retrieve about $15,000 in merchandise. Finding the rest - another $10,000 - has been difficult.
The owner called the delivery service after finding out what happened. The delivery service said the addresses he delivered the items to didn’t match the ones the retailer had.
The scammers reportedly have hit several high end stores, picking the best merchandise.
The lesson, according to the store owner: Don’t take someone else’s cell phone to talk to their bank - work through your phone.
I would guess too, even thought it sometimes seems a pain, check photo IDs when purchases are made and check the signature on the receipt against the one on the card.
Maybe it’s a hassle. But it’s better than losing 20 grand.