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(Checks, Credit Cards, and Gift Cards)
Merchants find themselves dealing with fraud on many levels
including checks, credit cards, and the ever growing popularity
of gift cards. Here are a few examples of fraud using
these payment methods:
Credit Cards:
- Merchandise purchased with lost, stolen,
or counterfeit credit cards.
- Merchandise purchased using debit card fraud.
- Fraud artists observe consumers when PIN is entered.
Checks:
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Merchandise purchased with bad,
stolen, or counterfeit checks.
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Checks easily produced by photocopier or PC with standard printer.
Gift Cards:
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Dishonest employees can “launder” gift cards, steal them outright, or switch or convert cards.
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Customer walks away with 0-value
card while the employee pockets the card with
the monetary value.
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Gift cards given in exchange for returned merchandise have helped perpetrate chargeback fraud.
Facts:
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Fraud costs U S companies
$6.6 billion per year.
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Chemical Bank of New York
reported a 50% increase in fraudulent checks
last year.
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Wells Fargo admitted that
transactions involving fraudulent checks rose
an alarming 500%.
Solution:
The U.S. Department of Justice
says to combat business fraud it is advisable
to install closed-circuit television (CCTV) camera
systems at checkouts.
Video Surveillance and Employee Training–Inform
staff of the known methods of check-cashing fraud
and illegal card use that involve collusion with
sales clerks and inform them of the consequences
of participating in such offenses.
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