This morning I was forwarded the below press release from the RCMP. It states that over the past two months there has been an increased number of reports of online payment fraud. Below you can read the press release with full details. Please be aware and be smart when doing business online. It is not a bad place, but a place where commonsense is a must.
Yellowknife, NT- Over the past two months there has been an increase in the number of occurrences reported to Yellowknife Detachment, RCMP and “G” Division Commercial Crime Section in relation to online payment fraud.
In the reported occurrences, a criminal contacts a local area business via e-mail. The e-mail requests a quote be completed for specified products(s). Once the criminal receives this prepared quote, they again make contact with the business expressing interest in the purchase of the product(s). This expression of interest to purchase is also accompanied by a single credit card numbers (or a list of credit card numbers), which the business is directed to use for the card not present purchase/transaction. The unsuspecting business completes the transaction using the fraudulent credit card number(s) provided to them and mails the purchased goods to a temporary address created by the criminal. Shipping companies then deliver the product to this temporary address and are not required to check the identification of the recipient (criminal).
As a result of using the fraudulent credit card numbers, the business is then responsible for the chargeback (chargeback occurs when the cardholder/cardholder bank disputes the transaction to the genuine credit card account). The business must reimburse for the amount of funds received from the fraudulent credit card transaction and other contractual chargeback fee(s). Costs to business = transaction amount + chargeback fee +product.
The “G” Division Commercial Crime Section provides the following tips to help prevent online payment fraud.
- Double check every order carefully. You will likely notice the criminal uses a different mailing address for the credit card vs. the delivery address.
- There should be a signature for every credit card transaction. A criminal completing online payment card fraud is often unwilling to return a signed purchase order.
- The criminal will sometimes request to make a large purchase, using many different credit card numbers. They will also request transactions on single credit card numbers be made on consecutive days for smaller amounts (ie. $6000 purchase = 12 transactions of $500 over 8 days).
- In a majority of the occurrences the criminal will only deal with the business over e-mail, and will provide excuses (ie. hearing impaired) why they cannot speak personally on the telephone.
- Finally, many times the purchase doesn’t make sense given the location of Yellowknife. If the purchase was genuine, why would a company located in Ontario make a purchase of product(s) that are made in Ontario and available at more competitive prices.
If you have any questions about online payment fraud, please contact Cst. Jarret MacDonald at the “G” Division
Commercial Crime Section, Yellowknife, Northwest Territories.