Quick thinking saves merchant from fraud

Posted: Wednesday, June 28, 2006

Had he been less wary, Dave Davis might have thought he was about to make a monster sale last Thursday.

But Davis, the manager at Allen and Peterson Cooking and Appliance Center in Kenai, was cautious and suspected he was teetering at the edge of a dangerous trap.

On the other end of the phone line, a man from Nigeria, speaking through a translator, told Davis he wanted to order a large volume of stainless steel kitchenware.

The man was anxious to make the order right away, but Davis was more than a little hesitant and denied the transaction.

“It just seems odd that someone in Nigeria would call a small town in Alaska to purchase a large quantity of kitchen products,” Davis said.

Credit card fraud reaches far and wide and can ruin businesses. Even in a small town like Kenai, where merchants can feel insulated from deceptive commercial transactions, businesses can fall victim to credit card fraud.

Davis said he has been wisened by an employee of his, Aubrey Goff.

Goff owned a business in Kenai called Peninsula Health and Nutrition with her parents for 10 years. About two years ago, however, the business received a phone call from a man claiming to be a doctor in Nigeria and requesting an order worth more than $10,000 in merchandise and shipping and handling.

In 10 years of business, her family never had problems with credit card fraud, so they accepted the order.

“We didn’t think twice about it,” she said.

But the credit card numbers used to make the purchase were stolen, and the credit card company would not honor the charges.

Consequently, Goff and her parents lost their business.

As a victim of credit card fraud, Goff said she is surprised so many businesses are comfortable with accepting purchases made over the phone using credit cards.

“Maybe people don’t realize that being a merchant, there’s no protection from credit card fraud,” Goff said.

The Kenai Police Department receives a report of possible scams originating from outside the United States about once every four months, said Sgt. Gus Sandahl.

“These things are commonly referred to as ‘Nigeria scams,’” Sandahl said. “Most people in this community should be pretty wise to these Nigeria scams because they’ve been coming out for 10 years.”

As a basic rule of thumb, Sandahl said businesses and private persons should be cautious of unsolicited offers that sound too good to be true or when they are pressured to make a a quick decision about a large transaction.

“Number one rule is if it sounds too good to be true it probably is,” Sandahl said. “Take the time to try to verify that it’s from an authentic source or buyer.”

Although it can be difficult to confirm the identification of the person who is using a credit card number over the phone, merchants can limit their liability by following the rules of the bank or company that handles their credit card transactions, said Mac Whisler, resident agent with the United States Secret Service.

But Whisler urged businesses to be extra cautious when accepting a large order from outside the United States.

“Especially if that’s unusual for them,” he said.

Common sense also goes a long way in protecting oneself from credit card fraud. Davis said he has received about a half-dozen suspicious solicitations over the phone at Allen and Peterson, and the call from Nigeria quickly raised red flags.

“Is it normal to sell to someone in Africa over the phone?” he said. “I don’t think so.”

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