Merchants hit for $2M in manager’s cheque fraud

DURING the first six months of this year, merchants lost more than TT$2 million in goods and services through the use of fraudulent manager’s cheques, but the figure is relatively small when compared to the value of transactions taking place annually. The disclosure was made by Sharon Christopher, general manager legal and corporate administrative services at First Citizens Bank, when she addressed yesterday’s seminar on Fraud  Awareness at the Crowne Plaza in Port-of-Spain. Christopher and several other persons in the banking profession provided a wealth of information for merchants and other persons in the business sector about the risks and precautions they could take to protect themselves from fraud, especially credit card fraud. Christopher identified the desire to quickly close a deal as a major reason why merchants fell victim.

She said many fraudulent cheques were usually passed in transactions done on weekends. She warned merchants to be wary of accepting cheques for large sums, especially when the persons insisted on having the purchased items delivered immediately. Christopher reminded the audience that losses were usually incurred by the merchants, and the fraudsters were repeat offenders who “looked like all of us.” Christopher also provided information about several security features on cheques which differentiate genuine cheques from fakes. Anthony Wong of Republic Bank said among the repercussions of credit card fraud were the significant losses to banks which resulted in increased fees, loss of sales and goodwill, and the threat of the termination of card merchant services.

He explained that when fraud ratios get out of hand, banks had no choice but to take away the point of sale terminals. Wong said this measure was not done on a large scale, but there were instances during the 14 years of the local credit card industry where banks terminated the service because regulations under licence with Visa/MasterCard were flouted. Wong said fraud was a huge problem and credit card fraud had the potential to be even more significant, if only because it was a two billion dollar industry worldwide. He said in his opinion “skimming” (where a device with a magnetic strip is used to collect card information) was “the single greatest threat in terms of fraud facing the card industry in the world.” The large audience was also told that deportees were involved in fraud.

Darren Carmichael, manager, corporate security at Republic Bank, said deportees were operating schools and camps as part of the expertise being used by fraud syndicates. He said deportees’ accents always managed to trick persons. He said other challenges included new technologies and the ability to cope with the ease with which fraudsters corrupted dedicated persons. On the issue of “skimming,” Carmichael admitted that while it was a problem late last year, “starting out as an epidemic, it has died a natural death.” He said banks and the Fraud Squad had put a serious dent in the trade. He said “skimming” had been conducted mostly at large hotels and restaurants, movie theatres and even gas stations. Carmichael also warned that persons should be observant as he related some of the scams employed at ATMs. He said on any given day at least $7,000 can be used by fraudsters.