CNP Fraud is defined as the unauthorized and/or fraudulent gathering, trade and use of payment data (card numbers, expiry dates and passwords). For CNP to occur, this data must be used in instances where the card and cardholder are not present (via phone, email, fax, or website). Most commonly, CNP transactions are performed by email, as it is one of the most unsecure methods to conduct card orders.
A scammer places an order for a product or service via a merchant’s Card-Not-Present channel (phone, email, fax, or website) intending to make the payment using a stolen payment card. The merchant, believing this to be a legitimate purchase, processes the payment on the stolen payment card(s) and provides/ delivers the product(s) or service(s). Eventually the real cardholder identifies and disputes the unauthorized charge. As a result, the merchant receives a charge back and subsequently loses any product or service rendered. Furthermore, it is the responsibility of the merchant to pay back the amount charged on the stolen card. Any merchant who accepts CNP orders can become a victim if they are not aware of fraud protection protocols or not abiding by the regulations.
It is also common to witness an over payment request when dealing with CNP fraud transactions. Scammers may demand the merchant charge extra on the card and forward funds to a third party – often a moving company to facilitate the shipment. By doing so, scammers are essentially turning stolen credit cards into cash.
Another version of CNP fraud seen within the airline industry is for scammers to purchase airline tickets using stolen credit cards and sell the tickets for a cheaper price online on classified ad sites. In situations like this, the merchant is not the only victim, so is the person purchasing the tickets being resold. In most cases, the purchaser will not be able to use the tickets as the merchant cancels them once fraud is confirmed.
Based on complaints received at the CAFC from 2016-2017 the industries most targeted by CNP fraud are: retail, airline and food/ hospitality.
Warning Signs - “Common Red Flags”:
Product / Order Flags
Larger than normal orders
Multiple orders for the same product; especially “big ticket” items
Orders from repeat customers that differ from their regular spending patterns
Customer requests “rush” or “overnight” delivery
Single card used with multiple shipping addresses
Billing address different than shipping address
Request that extra funds be sent to a 3rd party shipping company
Orders made using different names, addresses, and card numbers but are from a single IP address
Internet addresses at a free email service
Multiple cards used for one order (cards keep getting declined)
Purchaser name and cardholder name are different
How to Protect Yourself:
Know the Red Flags and compare to the transaction(s) received.
Prior to shipping merchandise, call the phone number the customer provided and verify the transaction information.
Be sensitive to priority shipments for fraud-prone merchandise, which may indicate a fraudulent transaction.
Be aware of orders that occur with a request for urgent shipment, especially if the shipping address does not match the billing address on the credit card provided.
Be aware of orders from repeat customers that differ from regular spending patterns.
Use available verification services (address and card validation code 2 (CVC 2), etc.) of the credit card network companies – Mastercard and Visa.
Contact your processers and ensure security measures are established to prevent victimization and reduce unwanted charge backs.
If you think you or someone you know has been a victim of fraud, please contact the Canadian Anti-Fraud Centre at 1-888-495-8501 or report online at http://www.antifraudcentre.ca
This document is the property of the CAFC. It is loaned to your agency/department in confidence and it is not to be reclassified, copied, reproduced, used or further disseminated, in whole or part, without the consent of the originator. It is not to be used in affidavits, court proceedings or subpoenas or for any other legal or judicial purposes. This caveat is an integral part of this document and must accompany any information extracted from it.
FRAUD ALERT – POWERBALL SCAM Even New Brunswick’s consumer watchdog can be a target for scam artists.
Last month, the CEO of the Financial and Consumer Services Commission opened a white business envelop delivered to his home. Inside was an official-looking invitation offering him a chance to purchase shares of tickets in an “exclusive, guaranteed-win superjackpot syndicate.” The invitation suggested all winnings in the USA $100-million powerball lottery would be divided equally between each share.
The invitation asked him to respond immediately and to confirm his purchase of shares by sending his credit card information – an obvious red flag. Upon closer examination, he noticed another warning sign. While the envelope was postmarked from Prague, the invitation letter had a return address in Ireland and the supplied envelope to mail in a purchase order had a Hong Kong address.It was one of three overseas lottery offers he received in the mail last month. The other two advised him he had won the lottery and needed to send payment to collect his winnings.
How to recognize a lottery scam
You receive an invitation with a “guarantee” to win prizes in a lottery.
You must first purchase something or pay an advance fee, such as taxes, to receive the prize.
You are asked to provide your credit card number and other personal information to enter the lottery or claim your prize.
The solicitation is from a foreign country.
Gambling in the United States is state controlled, which means you must buy lottery tickets from a licensed retailer within a state, and you have to return to the state to collect any winnings. Third-party ticket brokers are unregulated, which means there are no guarantees you will collect your prize. In many cases, only US citizens can claim a lottery win.
What to do if you receive a lottery scam
Don’t respond to any mailings of this kind. It will only result in an increase in junk mail, even if you just return to sender.
Never reply with your credit card or personal information.
Know what you pay for, avoid messy contractual clauses
Are you looking for a new fridge, washer, dryer or stove? Know that certain warranties come with an extra surprise: restrictive clauses that may end up costing you more than anticipated. Before buying, know which questions to ask to avoid being caught in a spin cycle.
When getting brand new appliances, budgeting for future repairs is not the first thing on your mind. However, as the machines "tumble down" their life cycle, it may become a bigger burden, especially if you are not covered by a broad warranty that includes both the parts and services.
Some warranties only cover the parts or the repairs, to varying degrees. Some may even require that you do business with an "authorized" or "accredited" supplier, which is often more expensive than your local repair shop. Regardless of the type of repairs or parts required, and whether or not they are covered by the warranty, if it is not completed by those cherry-picked suppliers, you risk voiding your warranty completely.
Before purchasing new appliances, make sure you know what you are getting yourself into. Ask the following questions:
Does the appliance come with a full or limited warranty?
What's covered by the warranty (parts, repairs or both)?
Are there different warranty terms for different parts or types of repairs?
Who should I contact if my appliance needs repairs – the manufacturer, retailer or a third-party warranty provider?
What documents will I need to keep in case of repairs?
When the appliance needs repairs, can I hire whomever I wish, or do it myself? If I do, does it affect my warranty and how?
When repairs need to be done, can I get the parts from any supplier or do I have to use an authorized dealer? If I find the part myself, does it affect my warranty and how?
Additionally, consider the following tips:
Don't be afraid to ask the salesperson questions. That's their job.
While retailers will have answers to many of those questions, also check the appliance manufacturer's website. It often provides more information.
If a question isn't covered, contact the manufacturer directly to learn more.
Keep good notes of the answers you get.
Help your family and friends avoid being jammed in a sticky situation and share the word.
Scammers are sending invoices to New Brunswick businesses, claiming they are past due on payment for a service they never requested or agreed to, such as a listing on an online directory.
The invoices request the business to pay via credit card, direct deposit or with a cheque. If a business responds to the invoice with payment, the scammer keeps the money. If they gain access to the business’ bank account through direct deposit, scammers can drain all the money from that account.
How to recognize a Fake Invoice scam
The invoice comes out of the blue, claiming you are past due on payment for a service you never requested or agreed to.
The contact name and billing address is out of date.
The invoice directs you to a URL that looks similar, but is not identical to the addresses for the Yellow Pages or Canada 411.
The logo on the invoice appears grainy, as if it’s been cut and pasted onto the letter.
What to do if you receive a Fake Invoice scam
Do not provide personal information, credit card numbers or other financial information to the scammer.
Report the invoice to the Canadian Anti-Fraud Centre.
What to do if you are a victim of a Fake Invoice scam
If you have responded to the fraudulent request or provided any banking or payment information:
Change your password and PIN for all online banking or financial services accounts
Contact your bank or financial institution immediately
Scammers have sent official-looking letters to several New Brunswickers claiming they are sitting on an inheritance from a long, lost relative just waiting to be claimed. In both cases, the letters claim to be from bank officials – one based in London and the other in the Netherlands. They ask for information, including bank account information, to proceed with the claim. These inheritance scams are like many circulating around the world. The letters offer you the false promise of a windfall to trick you into parting with your money or sharing your banking information.
How to recognize an Inheritance Scam
You are contacted out of the blue by a scammer posing as a lawyer or bank official offering you a large inheritance from a distant relative or wealthy person. Remember if it sounds too good to be true, it probably is.
The letter uses official-looking letterhead or logos, but will usually contain spelling mistakes or awkward language.
The logos appear grainy, as if they’ve been cut and pasted onto the letter.
You are asked to provide bank account documents and copies of identity documents as verification.
Follow-up correspondence with the scammer may request you to pay a series of fees, charges or taxes to release the inheritance money. Fees may be small amounts initially, but you will be asked to make more and larger payments.
What to do if you receive an Inheritance Claim Letter
Do not provide personal information, credit card numbers or other financial information to the scammer.
Avoid any arrangement that requires you to pay a fee to receive money.
Report the letter to the Canadian Anti-Fraud Centre.
What to do if you are a victim of an Inheritance scam
Change your password and PIN for all online banking or financial services accounts and contact your bank or financial institution immediately.