Don't Get Burned: Frauds, Scams & Stolen Credit Card Orders

June 18, 2008

Crooks don't take the summer off, so bookstore owners and managers hiring seasonal help will do well to remind newcomers as well as experienced booksellers to be vigilant about scams and fraudulent orders.

To help booksellers in their efforts to thwart would-be thieves, here's a brief rundown of some frauds and schemes reported in the past by ABA members:

• Fraudulent orders from abroad or out of state for expensive medical and law textbooks, technical books, Bibles, and even frontlist list titles. Any time a bookstore receives a large order from out of state or a great distance away, whether it's by phone or over the Internet, it is good business to call the customer to confirm the order as well as the card number. Asking for the three-digit security number on the back of the card ensures the purchaser has the card in his or her possession. A call from a staff member who explains that, for the cardholder's protection, he is calling to confirm the order, will likely be appreciated by honest customers. Chances are, if the card is stolen, the phone number will not work or will be a wrong number.
  
  
• Fraudulent orders placed via teletype relay services (TTY) for the hearing-impaired. A typical case involved a bookseller who received a large e-mail order for medical textbooks, initially from a ".uk" address. The customer indicated that he would arrange for a pickup at the store. The bookseller ordered the books from the distributor and had several of them sent via airfreight to the store. The customer continued to e-mail and to call the store via a TTY connection, finally requesting a DHL delivery to a California address. Although the initial credit card was accepted, problems arose with the ensuing delivery and credit card transactions; the e-mails and TTY calls became more frequent and less coherent, and the bookseller determined that she was a victim of a scam.
  
  Many attempted scams that involve the TTY service, such as this one, can be exposed by the store staff's use of a simple script similar to one developed by Harvard Book Store. In short, the bookseller politely insists that the customer, in a conversation "relayed" through a TTY operator, give his or her full name, billing address, credit card number, expiration date, and security code on the back of the card. The customer is informed that verifying the credit information, through the card issuer, will take three to five days. This is usually adequate to foil most bogus orders.
  
  
• Another scam involves receipt of tubes of "labor law" posters that have not been ordered. The posters depicting some aspect of workplace regulations come unsolicited, and some booksellers may be inclined to accept them without question. A more aggressive approach by the poster supplier involves a contact by mail or phone in which the store owner is told that he or she will be assessed huge fines if the expensive posters are not purchased and displayed in the workplace.
  
  
• A scam that's decidedly tailored to bookselling involves someone pretending to be an author who is scheduled to appear at the store, or who may have recently appeared, calling to request the bookseller wire him money because he is stranded somewhere. John Evans, co-owner of Diesel, A Bookstore, located in Oakland and Malibu, California, first reported this scam six months ago, but just recently a New York bookseller reported being the target of a similar attempt.
  
  
• Check fraud can include a fake or stolen check presented as payment or a retailer's check made out to a vendor that is stolen prior to its reaching its destination. Staff manning registers should be trained to properly identify customers presenting checks for payment, either through personal recognition or signature and other personal picture identification. When in doubt, they should know to whom on the staff they can turn for a decision. Among the signs of a fraudulent check (as outlined by the Check Fraud Working Group, including representatives of the FBI and the Department of Justice), are:
  
  
  • A check on which the name and address of the drawee financial institution is typed, rather than printed, or that includes spelling errors.
  • A check that does not have a printed drawer name and address.
  • A personal check that has no perforated edge.
  • A check on which information shows indications of having been altered, eradicated, or erased.
  • A signature that is irregular-looking or shaky, or shows gaps in odd spots.
  • A check printed on poor quality paper that feels slippery.
  • Check colors that smear when rubbed with a moist finger. (This suggests they were prepared on a color copier).
  • Checks presented at busy times by belligerent or distracting customers who try to bypass procedures.
  
  In the case of a retailers' check stolen prior to reaching the intended vendor, the perpetrator alters either the check amount and/or payee information and then finds someone who will cash the check and send part of the payment back to the scammer. A previous BTW article outlined some check fraud tips from the National Check Fraud Center.

The inventiveness of crooks knows no bounds, so it's good business practice to be proactive: Teach staff that if something about an order seems fishy, it's store policy to take the time to look into it.

Topics: About ABA, News - Bookselling,