As the economy slows and whispers of recession bounce among boardrooms, many people are looking for ways to keep their bottom lines in the black. For some businesses, that may mean letting employees go or eliminating non-peak hours. For others, it can be looking for ways to increase income through illegal means.
A slow economy increases the temptation for business owners to stretch the rules with their credit card terminal. Merchants can create cash advances through refunding or processing sales to their personal cards, both of which are not allowed and can be a financial risk to North American Bancard. Others may manipulate their business type or records to help get themselves a better rate.
Be on the lookout for inadequately explained ownership changes and liquidation sales. This can signal the end of a credit card processing relationship – a time when the business owner may try to defraud, not satisfy customer complaints and then cancel their service. Also watch for potential personal expenses (such as travel) and any bizarre discrepancies of sale amounts or products sold on a merchant account.
Recently, we saw a net deposit to a merchant of $.10. This raised a few flags. As we looked through the transactions, we realized that the merchant had issued $500,000 in refunds to foreign debit cards, while charging $500,000.10 in sales to credit card numbers that he had compromised. His plan was to have his friends in England withdraw the $500,000. We were able to contact Visa and MasterCard to freeze the funds and then pro-actively work with the banks to ensure the proper refunds. If someone hadn’t said “hey, that doesn’t look right,” we would have lost half a million dollars to fund the fraudulent intent by this international group of thieves.
So if something looks suspicious, be proactive and tell somebody. Maybe you could be the one saving the company a whole lot of money.
