Point-of-Sale Fraud Alert

Recent incidents in the U.S. in which criminals are committing fraud through processing fraudulent return transactions. As part of the fraud scheme, criminals obtain Point-of-Sale (POS) devices—either from an acquirer or agent while posing as a merchant, from online resellers or auctions, or through theft—and program the POS devices with the credentials of a legitimate merchant, thus effectively cloning the unsuspecting merchant’s actual POS device. Criminals use the cloned POS devices to complete returns to gift cards, often in the range of $2,000 – $6,000 per transaction. After the returns are posted to the gift cards, the cards are cashed out at ATMs. Criminals prefer gift cards and in some instances debit cards.  These products fund rapidly, allowing fraudsters to get their hands-on cash immediately.

What can you do to protect yourself?

  • Always verify anyone calling you posing as your merchant provider
  • Monitor your transactions often, especially credits
  • Make sure your terminal or POS doesn’t allow credits without a corresponding sale
  • Educate your employees
  • Never let anyone other than your merchant provider, touch your terminal or Point-of-Sale System
  • Change passwords often and use caution if you are working remotely

As a business owner, you can never be too cautious. These crimes happen primarily on the weekends (especially long holiday weekends).  Criminals will choose to take advantage of the operating hours of the merchant and financial institutions.  Protect your business this holiday and throughout the year!