Thieves use merchant accounts to commit fraud

Thieves use merchant accounts to commit fraud

Merchants are troubled by recent news of credit card tricksters using merchant accounts for their latest series of fraudulent activities.

A recent case  happened in New Albany, Ohio, when a new twist was given to identity theft. Fraudsters set up a phony merchant account to scam a grand total of $24,405 between June and October of this year.

A man living on the 7000 block of Doran Avenue told police that he was the victim of this elaborate identity theft hoax. Fraudsters used his name to set up a merchant account that allows users to run credit card payments through an online system, rather than a credit card machine.

The police reported that the man's name was also used to create a bank account. More than $24,000 worth of credit card payments were wired to the man's checking account, before being cleared out by the criminals.

It is unknown how many other victims there may have been in the scam, or who actually owned the merchant account.

As a merchant account holder, there are ways you can protect yourself, your business and your customers from fraudulent activity. A credit cardholder's identity needs to be verified, as well as the validity of the transaction. A credit card criminal will hit one account at a time, then move onto the next one. Individual pieces of information will be collected over time, which will be gathered together for a multi-level scam. By keeping yourself aware of simple things at the beginning, you will protect your business account in the long run.

• Be wary if a shopper is purchasing multiples of the same item, likewise if he or she is making pricey purchases without spending time to consider them. The shopper may be using phony credit cards to purchase these items, before reselling them for cash.
• Be wary of credit card telephone orders from unknown customers.
• Keep your merchant equipment secured, and don't leave receipts on the counter for any length of time.
• Don't give out the proprietor's full names, addresses or personal details to casual inquiries.
• Report fraudulent credit card activity to police, as well as theft of credit card transaction receipts and equipment.

Keeping an eye out for suspicious activity is the first step to arming yourself. Keeping your business barred from criminals will keep them from making a small step through your business's door.

Published: November 5,2023