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April 24, 2015

Chosen Payments Fraud Alert – New Scam Hits Limo Industry

As the payment credit card processor to hundreds of limo operators nationwide, we want to inform you of a major fraudulent scam going around the industry that is negatively affecting operators.

Scammers are booking trips and giving a credit card for payment, but the credit card declines. When operators reach out to inform the potential passenger of their declined card, the passenger tells the operator that he will call them back as there should be nothing wrong with the card so he is going to call his bank. Then the passenger/scammer calls the operator back and says the bank gave him an authorization code to use and for the operator to plug this into their system and they will get an approval. This passes as very professional and doesn’t seem like a big deal. The operators take the authorization code, plug it into the reservation system, or payment gateway, and receive an approval code as an “offline sale.” An offline sale means that the actual sale was never authorized or approved through the card issuing the bank. Operators may not think there’s any cause for concern because they get an approval and money goes into their account from the transaction. But when the card-issuing bank finds out about the charge, they dispute it because it’s not legitimate as they never provided the actual authorization code. By now, the operator has done several trips, paid the chauffeurs and all costs associated with it, and suddenly the money is yanked out of their bank. There’s nothing operators can do about this chargeback because the authorization code used was bogus.

This has cost operators that process with Chosen Payments more than $35,000 in the recent months. In the research on behalf of our clients, we found that one particular scammer has cost merchants $300,000 in recent months and we have a list of merchants that are affected as well as a variety of information provided by the scammer. This scammer usually gets picked up and dropped off at high-end places and will use the operator for several trips in a period of a few weeks. It’s not just limo operators that are being affected as many hotels and restaurants are as well. In one case, Tom Soliman of Allstarz Limousine in Orange County CA (a Chosen Payments clients and active GCLA member) was scammed for close to $15,000. According to Tom during one trip with this scammer an Allstarz Limo chauffeur took the passenger to a car dealership in Orange County. The scammer literally bought two brand new cars from the dealership and when asked by the chauffeur how he did this he said that he paid on his credit card and that he no longer needed the chauffeur. This fraudster has been going by the name of Charlie Barbero and the credit card being used is a Wells Fargo card.

Tom Soliman of Allstarz Limousine has volunteered to speak to anyone who wants more info on this. Tom can be reached at 714-239-1115. As a major advocate for our industry and one whom hates to see bad things happen to good people I encourage that, as an industry, we stand together on this issue by sharing the details and further educating you in an effort to inform, prevent and protect you from being a victim of these known scams. Additionally if anyone has input or an idea on how to assist Tom, I am confident the feedback would be greatly appreciated.

Here are steps to avoid this:

  • MAKE SURE YOU NEVER TAKE AN AUTHORIZATION CODE FROM ANYONE EXCEPT YOUR CREDIT CARD PROCESSOR OR THE CARD-ISSUING BANK.
  • Never run an offline sale in this scenario. 
  • Know your client and if it seems shady don’t do the trip. 
  • Check ID and match it to the credit card. 
  • Request a cc auth form and copy of ID prior to the trip. 
  • If you’re doing business with a new client, get them to show your driver their ID and have them sign a trip ticket and sales slip while comparing the signature to their driver’s license. 

As the preferred payments credit card processor to the limo industry, we at Chosen Payments pride ourselves on educating the industry. If you have further questions or concerns, please feel free to get in touch with us. Whether you’re a client or not, we will offer free consulting and advice to all operators whom reach out. Forthcoming we will be writing an educational article in which will provide greater detail on how to avoid being scammed in this regard.

If anyone has been affected please share your experience with us so we can build upon our findings to keep the industry informed and safe! Additionally please share this info with your peers and affiliates. For more info contact Jeff Brodsly, CEO of Chosen Payments (805) 910-1445, jeffb@chosenpayments.com.

 

With Much Respect,

Jeff Brodsly

President & CEO

7 Comments

  • Sarah says:

    We are here to provide feedback and help educate you. Please feel free to leave a comment so that we can create a informational stream of inquiries and experiences.

  • Jeff says:

    If anyone has been affected by this scam please share your experiences so we can all protect eachother.

  • Jim Luff says:

    I think anytime you have an issue with a card being approved a red flag should go up. I insist on ANOTHER CARD. If that fails, I’m suddenly “sold out”.

  • This happened to our company as well, with the same customer – Charlie Barbero. Our company books vacations at mountain destinations all over North America and we take credit card numbers over the phone and process payment online via our merchant account. I recently received a chargeback for Charlie Barbero, who stayed at Mammoth Mountain, Californa in February. The transaction looked strange when I looked it up on Moneris – it was an “offline sale”. The credit card wouldn’t work so Charlie Barbero (supposedly) called his bank, called us back with an authorization number, which we put through as an offline sale. Nothing weird about that. We received the money but when the bank found out, they denied the charges and we were hit with a chargeback. I provided proof of Charlie Barbero’s stay and details of the transaction, and found out this week that it is still not a valid transaction and we lost the chargeback.

    When I initially received the chargeback, we contacted Charlie Barbero as usually a phone call by the customer to their bank and a fax to Moneris by me sorts it out. Charlie Barbero promised to contact the bank and provide an alternate form of payment if required. Frankly, I’m surprised he answered the phone then as he cannot be reached now but I suppose it was just to stall us. We Googled him today and found numerous reports of fraud including $11,000 NSF cheque, $4212.49 security deposit and $15,000 for limousines. I suppose we’re lucky that it was only $1300.

  • I believe I am being scammed right now. I have had a text dialog with a person for days now and am about to charge a different card. The “Ride” is scheduled for tomorrow afternoon and I am waiting for the offline approval code to be given. I would like to catch this scammer in the act. Any advice? Wire fraud isn’t taken seriously until their is an actual loss.

  • Perfect examples of greed taking over brain power and employees just not paying attention. Rule of thumb: Better safe than sorry … If the transaction doesn’t run through smoothly, decline service or get cash or other form of payment that that eliminates the operators’ liability. If the business swipes the card and follows the credit card processors’ rules, the business isn’t liable past that point. It then becomes someone elses problem and you get to keep the money.

  • I receive the following types of emails from potential clients (below) i get warning signs from this because they do not indicate the city they are wanting to be picked up in. they always mention this will be paid by credit card.
    I reply back and let them know that i find their email to be very vague, that they need to supply other information on their itinerary, Where they flying to and from. anything to let me know they are phishing for a chance to sucker me. I do not supply what area i operate, this helps me to catch them in it.
    I also let them know that i receive a number of these types of requests and that i will be submitting it to the authorities, i dont hear from them again.

    but i would like to know more about the “Request a cc auth form and copy of ID prior to the trip. ” who supplies this auth form?

    regards
    Shawnee

    Good Afternoon ,

    My name is David Torrey Of HSK Travels & Tours Inc,Our company Provides Travel & Leisure Services to Our Clients Worldwide .I would like to make a transportation booking for our clients who will be visiting from Egypt for an Event. Your service would be needed on the day of there arrival from the airport to the Event Center and also to the hotel they’d be lodging. Please find below a brief details of the transportation needs .

    NUMBER OF GUESTS : 5
    ARRIVAL DATE : 16th March 2014
    CHARGE FOR AN HOUR
    TOTAL CHARGES FOR 6 HOURS

    Please kindly do get back to me as soon as possible with the total cost as required,so i can provide you with my credit card details for the total payment of the Service. Furthermore,do let me know the credit cards accepted for payment .

    Your Earliest Response Would Be Appreciated .

    Keep In touch.
    Dave .

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