Hit and Run

That’s what it’s called and Fluid Technology would like to end the year spreading the word about a growing fraud ring that is affecting manufacturer’s representatives nation wide.

A new customer calls in looking for a quote on parts, gives you their name, company name, phone number and a complete RFQ.  Your company hasn’t done business with this firm before, so you check their website (looks good), check the person’s Linked In account (valid employee) and ask for a credit application.  The customer needs the parts, and needs them quickly, so they provide credit card for payment.  Customer also provides the paperwork for Federal Express/UPS to come in and pick the parts up, send them overnight to their jobsite location.  Credit card is run, goes through just fine.  Fedex is called in, shows up to pick up the package.  You’ve made a new customer very happy filling their emergency need with appropriate response.

All is good.

Until the actual credit card holder sees the charge and disputes.  At this point, the phone number you’ve been using to contact the customer is disconnected, the email address you used to communicate bounces back.  What happened?  Well, you’ve been hit, and you take the loss as fraud.

So what can a rep firm like ours do to protect ourselves?

Here’s some suspicious behavior to look for:

  • Are they purchasing large amounts of merchandise?  Too good to be true – likely is.
  • Spelling errors – in street addresses or in email.
  • Beware of RUSH orders!
  • Scrutinize shipping addresses – don’t ship if shipping is different than the billing address.
  • Don’t ship out of the country.
  • If multiple card numbers are used to split a purchase.

 

If your business accepts credit card orders without the card physically present, you are assuming a greater risk.

  • Upgrade your credit card processing system!  With new regulations, credit card companies are making strides in fraud prevention, but those strides are to protect the consumer, not the vendor.
  • Obtain a signature and request proof of identification to match signature to the card
  • Upgrade your system to use all of the CVV2 Filters your system can provide.  AVS (Address verification system) can include street as well as zip code.
  • Call the issuing credit card company.  Did you know that even if your system asks for the cardholder name, it doesn’t insure that the name on the card matches?  If you have suspicion, you can call the following numbers to verify :

Mastercard     800-627-8372

Visa                    800-VISA-911

 

Stuck with the freight as well

When all is taken care of, you’ve licked your wounds, here comes the invoice for the overnight freight.  Yes, the customer arranged it.  Yes, the customer called in the pick up.  BUT – this customer used a fraudlent account number as well.  Ultimately, the shipper is responsible for freight charges if there is a dispute per T&Cs.  What do you do about that?

  • Provide the BOL yourself and list the customer as the shipper as well as the receiver

 

Be vigilant, be diligent and know that the majority of new customers out there will be good for business.