Sheriff issues credit card fraud alert to merchants

-- Madera County Sheriff's DepartmentApril 17, 2013 

Never mind buyer beware, Sheriff John Anderson is now alerting merchants to a growing criminal trend involving credit/debit card fraud costing retailers thousands and thousands of dollars.

Currently the Madera County Sheriff's Office Mountain Division is investigating massive fraud involving at least nine businesses -- one of which operates in Fresno.

A Fresno limousine company is out more than $29,000, local casino is out nearly $30,000, and other retailers who have suffered financial setbacks include the Queens Inn in Oakhurst, True Value in Oakhurst, the Black Hawk Lodge in Coarsegold, Hertz Rental in Oakhurst, North Shore sporting goods store in Oakhurst, the Pizza Factory in Oakhurst, and the Great American Inn, also in Oakhurst.

In each case the same method of defrauding businesses was used -- blank debit and gift cards with information cloned from legitimate account numbers that belong to someone else. And the rightful owner of those numbers never lost his or her card. How's that possible?

Thieves don't need your actual card to acquire your information. They don't even need a magnetic reader to steal it. Blame the internet, from which thieves obtain account information in a variety of ways, and then verify those accounts by doing what retailers do -- call a Universal Merchant telephone number to make sure the account is valid.

Once they have a list of valid account numbers, they emboss those numbers on dozens of blank debit and gift cards, and use those cards to rack up numerous charges.

Thieves are banking on the fact that few merchants exercise due diligence to not only make sure the public is protected from fraud, but their own business as well. As a result, businesses are starting to take a financial hit.

In the Fresno Limousine case for example, the owner of the company said every time a charge was made the card went through -- never once declined. The charges started in December 2012. By March 2013, the owner received what is called a charge back notice, meaning that he is responsible (not the bank) for more than $29,000 incurred by thieves who used someone else's account number to be chauffeured to and from Madera County.

Some merchants are now insisting customers give a thumb print before they can cash a check or even make a plastic card purchase. But the transaction will be made nonetheless.

How to avoid falling prey can be as simple as examining a card.

Recognizing legitimate cards

Legitimate cards follow a standard set of specifications like color and quality for example. And most are stamped with raised letters and numbers that are equally sized numbers that are spaced evenly on the card. The signature panel is uniform in size and is almost impossible to scrape off.

Banking institutions issue credit cards that contain raised letters, numbers with a specific font, full name, expiration dates, a security ID on the back side, holograms as well as a black strip that can be read when swiped.

If the card can't be read when swiped, the merchant should take a closer look at the card and ask for an ID.

If the reader isn't working right, merchants should never manually enter the numbers. Instead they should consider requesting the customer to provide another form of payment.

Altered Cards Debit/Gift Cards

Altered cards are actually original cards from which the original information has been removed and replaced with legitimate account numbers, names, and expiration dates.

Gift cards are, if not more popular forms of payment. They are generally embossed with lettering and numbers and say Valued Customer. Like credit cards, they too have a magnetic strip on the back.

Gift cards should be examined before swiping them. Engineered cards will have a thin film on the card that can be peeled away. No card has a thin layer of film on it.

If the card can't be read when swiped, again, merchants should consider requesting the customer provide another form of payment.

If the merchant manually enters these numbers, the transaction will go thru, but banks will not honor a fraudulent charge and will kick it back to the merchant by way of a charge back notice. In others words, if a fraudulent transaction is made, retailers could find themselves footing the bill.

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