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many scams generate similar types of activity that retailers can identify and potentially stop if they’re familiar with the signs.
• Clerks may observe elderly people, who don’t seem to be familiar with prepaid products, buying large de- nomination cards.
• Clerks may overhear comments from customers about paying old bills, paying emergency medical expenses for a relative, making a loan payment or paying taxes related to lottery winnings.
The Problem: Once the “signal strength test” is run and the store clerk has given the fraudster the PIN numbers, he will apply it to a GPR card and quickly withdraw the money. Or, if the fraudster
has left the store with the terminal, he potentially can steal data from it, such as information on the product menus, before the theft
is identified.
How to Fight It: Strong security
is about training everyone—
from clerks to managers—
and empowering them to ask questions and escalate phone calls if anyone asks them to do anything that even appears suspi- cious. Clerks should never cooper- ate with anyone over the phone who is asking them to do some- thing involving the terminal. And, a terminal should never be let out the door without the manager requesting information from the person attempting to remove the terminal and verifying with the service provider via its normal customer service number.
Identifying the prevalent forms of fraud and following procedures can create a smarter, more protected in-store environ- ment that will have a positive effect on deterring fraud of all kinds.
Strength through
Training
The magnitude of prepaid card-related fraud for retailers depends significantly on the scope and effectiveness of their employee training, according
to Rolling.
“Retailers experience very high employee turnover, which makes
it difficult to ensure that all employ- ees are trained fully and consis- tently at all times to defend against these types of fraud,” he says. “What’s more, prepaid cards are a little different from other payment cards, and what makes them a great product also can make them a tool of fraudsters. The fact that prepaid products are sold from a J-hook is part of the beauty and utility of the product.”
The fight against fraud is a con- stant battle. By committing to ongoing employee training, retailers can make a significant difference that protects their profits and their customers, while enabling them to offer a valuable and profitable product to their customers.
“Following best-practices pro- cedures is very valuable, and
we strongly encourage everyone engaged in the sale of prepaid products to be familiar with and abide by those best practices,” Rolling advises. “Fraud is a con- trollable expense and the degree to which you control fraud en- ables you to be more competitive and profitable.”
volume 7 • fall 2014
5
Inadvertent Retailer-
Assisted Fraud
The Setup: A fraudster calls a store claiming to be from a trusted vendor and asks the store clerk to test the signal strength of a POS terminal by activating several prepaid card PINs. Or, a fraudster visits a store and removes the terminal for “repair.”
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