With technology on the rise and our economy weakening more and more, scams are evolving within various industries. The merchant services industry is vulnerable to a variety of different merchant account scams.
About a month ago, a merchant contacted our company to set up a merchant account and began running thousands of dollars in transactions. After the first month of processing we received a call from a business owner claiming he received a credit card processing bill from us, but that he does not take credit cards. The imposter account was a SCAM! The fake purchases were made with stolen credit cards and deposited into bank accounts owned by the fake company. These guys generally run small transactions and fly under the radar. They also registered a domain name that is similar to that of the business they were impersonating.
How might this have been caught sooner? Merchants and consumers should check their credit reports frequently and report any suspicious activity. It is also helpful if companies look through the web to see if there are websites that resemble their own or use their business name.
Most merchants may not know this, but there is a black market that trades card holder information and business information. An office machine company I worked with had a situation where a customer charged $25,000 in office equipment. The merchant waited three days before using the money deposited in his account. It wasn’t until two weeks later that he found out that the card was stolen and the purchase was fraudulent. The card processing company held the merchant liable for 100% of the transaction. Now this merchant was out the money and $25,000 worth of product.