Merchant Fraud Alert


Recently we have prevented a type of fraud for a few of our customers and we want to make you aware of the scam so you can be alert to any activity that matches this profile. In the two cases we came across, our risk department was able to prevent the merchants from losing money and merchandise, but it’s always best if you are able to catch a scam before you make a charge.

scam_1464731203The scam goes like this: a customer will come into your place of business or call you and they will want to make a very large purchase. They will try to get you to force through the transaction on your terminal or POS using a phony “pre-authorization” code. The “customer” may even hand you their cell phone and say they have their bank on the phone.  The person on the other end of the phone is part of the scam and will give you a phony authorization code to enter into your terminal.   Do not force through a transaction of this size! If you have questions about an authorization code, call voice authorization or call Clearent and ask to speak to the Risk Department.  If you think you may have experienced this fraud, please call us as soon as possible to see if we can stop the transaction and help you recoup your merchandise and money.

If the authorization code entered during this process is invalid the issuing bank can chargeback the transaction and debit IPS for the sale.  At this point you would be out the money and the product.  Do not think “well the sale went through so it must be good.” Remember the issuing bank has 120 days to chargeback a transaction, and you can get left holding the bag.

Contact Justin Smith at 214-546-0983 for a consult!