Retailers are being warned to watch out for fraudulent credit cards after some of Melbourne’s biggest department stores were made victims in a $500,000 scam.
Myer, David Jones, Dick Smith and JB Hi-Fi were all attacked in the scam, which involved using fake credit cards to buy hundreds of gift cards.
Student Ching Boon Goh used an embossing machine and blank credit cards to produce the fakes, along with stolen credit card numbers, the Melbourne Magistrates Court was told yesterday. A team of students accompanied Goh in using the cards in stores to buy gift cards.
Goh netted about $226,000 from the scheme, selling the gift cards on to other students for 70% of their original value.
In a statement delivered to the court, investigator Tony Davie said Myer began an investigation after it became aware of the scheme last December. He said users of fraudulent credit cards carry a “number of skimmed credit cards and photo identification which match the credit card names”.
Australian Institute of Criminology principal criminologist Russell Smith says other retailers should be aware that fraudulent credit cards are used, and they should remain alert.
“I suppose this is all about doing the basic checks on a customer to make sure they correspond with the person who presents the card. Checking whether their name matches, the signature, if the card itself appears to be legitimate and that sort of thing. Often in these scams it’s pretty obvious if a number of these things don’t line up, but retailers don’t often use these checks.”
Smith says retailers should make sure front-end staff should be aware of how to identify fake cards, and says there should be set policies in place to ensure suspicions of fraud are reported to a manager.
“These are the staff who every day can do these superficial checks on legitimacy. The other important thing to realise is that these things should be reported to police, even if there is no possibility of investigation. It provides a good source of intelligence, and often if they get a group of similar reports in a similar area they can launch an investigation and sometimes can reach success, it’s happened.”
“Another thing retailers can do is inform customers about being careful in what they are doing, tell people to secure their cards and so on. The good news is that with the use of chipped cards using PINs, the number of fraud cases will decrease. Statistics from Britain and Europe are already starting to show reductions in fraud where credit cards are used with PINs.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
