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November 29, 2018

Merchant Fights Fraud – Delivers a Payback

It was back in February or March when Mike Weisberg, owner of Greater Binghamton Limousine Service became a victim of fraud. The thieves would come calling again and again. The third time was the charm and resulted in an immediate arrest.

In the first fraudulent encounter, Weisberg received a call asking for immediate transportation to Buffalo, a 400-mile round trip. A trip that cost $875. Weisberg did everything he was supposed to do. He obtained the billing address, the zip code and the three-digit security code. Everything went as planned and the crook even complimented the chauffeur on a job well done and added a $50 tip to the card. This in itself can be considered a red flag but it is a common occurrence in the ground transportation industry.

A month later, the crook was back. You might assume the crook thought he found an easy target. If it worked once, why would it not work again? The same procedures were followed with the credit card transaction for a new trip to New York City and the fare would be $1000. Upon arrival in New York City, Weisberg’s chauffeur called to tell his boss that he felt unsafe in one of the seediest parts of the city. This chauffeur was not a timid guy. In fact, he is a rough and tumble kind of guy who ran the streets of Brooklyn growing up. This was certainly a red flag as this isn’t the type of neighborhood visited by people who charter chauffeured vehicles. Weisberg had to call his client and make up an excuse to get the chauffeur back on the road home. The client had no issue with this action during the call.

After the second trip, things began to spiral. Weisberg had the $875 removed from his bank account as part of a chargeback investigation for the first trip to Buffalo. He submitted his signed invoice and contract which was signed by the same name it was booked under. The same name of the cardholder. Soon after, there was a second chargeback for $1000. Again, Weisberg asserted that he performed the work, used the Address Verification System (AVS) and had no service issues. Of course, none of this mattered because the person who used the card wasn’t actually the owner of the card.

Weisberg contacted Chosen Payments for assistance in fighting the chargeback. There wasn’t much we could do to help in this situation. Then, opportunity presented itself. Thieves tend to get greedy and this fraudster came back a third time and wanted to go to Buffalo again and wanted to leave soon. Weisberg knew the voice, the M.O., the destination and the pick-up location. This is when Weisberg became Detective Weisberg. He searched online for the billing address of the card. Remember, the billing address was correct and matched in the AVS system. However, the address was in Stewart, VA and the pickup location was in a seedy neighborhood nearby in Endwell, NY and the destination was equally seedy in Brooklyn. Weisberg called American Express and confirmed the name of the cardholder for the American Express card presented. It was indeed the same name. Weisberg found the billing address of the credit card belonged to a gas company and he called that gas company and learned they had an employee by the same name as the cardholder who was currently working on assignment in China. It was Game Over! Weisberg knew the card was stolen.

Because Weisberg had taken the time to file a police report on the two prior chargebacks, he had a police case number to reference. Being creative, Weisberg initiated a three-way call between himself, the CEO of the gas company (who really owned the card) and law enforcement officials. Fortunately for Weisberg, the oil company claimed it was them that was being defrauded since the bill would come to their office and they would be responsible for paying it or disputing it. Either way, it would be their problem as well as the merchant’s problem. They demanded police action.

This story concludes with the police setting up a sting and asking Weisberg to go forward with the service. He was to have the passenger sign the contract and credit card receipt. Once this happened and the car pulled away from the curb, police stopped the vehicle and arrested the passengers, one of whom had a warrant. The one who signed the credit card receipt had five felony warrants for his arrest and was in possession of stolen Social Security cards and even the Driver’s Licenses of other people.

The lessons to be learned here include, filing a police report when fraud is committed against your business, listen for fraud clues during a phone order and do your own detective homework if the police aren’t helping you.

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