Credit card fraud discussed at recent seminar
By Kathy McCarty
Staff Writer
PRESQUE ISLE — Credit card fraud was the topic of a seminar held at the Public Safety Building in Presque Isle Jan. 18, featuring a presentation by Larry Wagoner, AVP Merchant Sales, TD Bank Merchant Services.
Staff photo/Kathy McCarty
CREDIT CARD FRAUD 
was the topic of a Jan. 18 seminar held at the Presque Isle Public Safety Building, with a presentation by Larry Wagoner, AVP Merchant Sales, TD Bank Merchant Services Pictured, from left, are: Jean Brawn, owner, Oasis Salon; Ray Hews, TD Bank; Theresa Fowler, Central Aroostook Chamber of Commerce; AJ Clukey, MMG Insurance; Dianne Collins, MMG Insurance; Wagoner; and Paul Tormey, TD Bank.
Joining Wagoner were area business and community leaders, including: Matt Irwin, chief, Presque Isle Police Department; Dr. Charles Johnson, assistant professor, criminal justice, University of Maine at Presque Isle; Brad Plummer, Marden’s; Leigh Smith, Bradley’s 24-Hour Citgo and Car Washes; Michael Thibodeau, Dianne Collins and AJ Clukey, all of MMG Insurance; Don Samiya, Graves Supermarket, Inc.; Jean Brawn, owner, Oasis Salon; Ray Hews, TD Bank; Theresa Fowler, Central Aroostook Chamber of Commerce; and Paul Tormey, TD Bank.
Wagoner said we live in a “new world of fraud” and provided an overview of fraud trends, emerging threats, current fraud tools, best practices, examples of common scams and discussed payment data security.
Among the concerns raised was the increasing problem of identity theft and credit card compromises.
“While mega breaches capture headlines, over 90 percent of all data breaches occur at smaller businesses,” said Wagoner, noting problems included the counterfeiting of cards and the sale of information on private marketplaces operated by hackers.
Although new technology has resulted in increased scams occurring via the Internet, Wagoner said older fraud schemes continue, such as mail order.
“Merchants eager to make a sale overlook the warning signs,” he said.
Wagoner said fraudsters are “organized and very sophisticated,” hiding behind phony websites, making detection difficult.
One method of determining the validity of an order, according to Wagoner, is to perform a “manual review of high-value orders.” He also recommended confirming billing information, phone numbers and other pertinent information. Another suggestion he made was to “flag multiple transactions from a common address.”
Advice was given on how to train employees to spot signs of fraudulent activity.
“Train all customer-facing staff on the common signs of fraud, including: large order value, requests to split payment over several cards, requests for merchants to use customer’s designated ‘shipping agent,’ grammatical errors in e-mail correspondence and calls originating from hearing-impaired customers requesting international shipments,” said Wagoner.
Wagoner said it was also important to “conduct background checks on employees with access to payment information.”
Criminals make a living out of using stolen credit cards. Wagoner advised the group on some of the more recent types of criminal activity.
“A customer places a large order over the phone or online for a product or service that requires a down-payment, deposit or full payment in advance of fulfillment. Payment is made using one or more credit card accounts which have been stolen,” said Wagoner, as he continued, “The customer calls in to cancel or modify the order and requests the refund be made via wire transfer or similar service (Western Union). The merchant then issues a refund as instructed.”
Wagoner said the merchant ends up on the hook for chargebacks/losses for unauthorized use, which are typically received 14-60 days after the initial sale.
“Merchants have found they are unable to contact/locate the customer, having their mail returned and calls to phone numbers they’ve been given go to phones that have been disconnected,” he said.
Wagoner discussed a variety of fraud scenerios, noting that “merchants are liable for all charges.” He stressed the importance of using the most updated equipment possible for credit card transactions.
“They may be expensive updates but you need to have them done because of liability and responsibility for card breaches. Liability for a business could be upward of $500,000,” said Wagoner.
Wagoner discussed the newest “swipe technology,” using cell phone attachments to read cards and the pros and cons of such equipment.
Preventing fraud begins with the merchant, according to Wagoner.
“There are different levels of training. The biggest credit card fraud we had was internal. Another involved a physician. That was in the 1990s and we didn’t have the programs to immediately track transactions — took weeks to find,” said Wagoner.
He said one of the best ways to prevent credit card fraud is to shred any discarded documents with credit card numbers.
Wagoner said tough economic times have made for more criminal activity, as merchants scramble for every sale they can make.
“In this economy, we see more fraud — retailers who are struggling are more apt to make a sale. And with technology, there are more ways to commit fraud,” said Wagoner.
For more information on payment card fraud, call 753-3394.
