The HRP/RCMP Integrated Financial Crime Unit has arrested a man in connection with a gift card scam.
Over the last month, investigators have noticed an increase in scams involving gift cards. Fraudsters are going to local businesses and purchasing numerous gift cards that need to be activated by store clerks. The fraudster presents a counterfeited credit card to pay for the gift cards and advises the clerk that his card may be over its limit but provides an authorization code that the cashier can enter to complete the transaction. This causes the receipt to be generated, the cashier authorizes the gift cards and the fraudster leaves with valid gift cards. The store becomes aware of the fraudulent nature of the transaction several days later when informed by the credit card company. Because these transactions involve the store entering a manual override in the point of sale (POS) machine, the credit card companies may not cover the losses.
On March 24, investigators arrested a 19-year-old Halifax man in connection with these frauds. He was released from custody and will appear in Halifax Provincial Court on May 1. He faces charges of fraud under $5000, unauthorized use of credit card and theft under $5000. The investigation is in its early stage and additional charges are anticipated.
Investigators would like to remind businesses owners and clerks to be diligent about gift cards purchases, specifically:
- Be wary of a customer who is overly helpful or knowledgeable about manual override procedures involving POS transactions, especially when it involves a significant purchase.
- Be diligent in confirming that a credit card is valid and train your staff appropriately.
- When in doubt, contact the credit card issuers to confirm the validity of the card.
- Ask for ID when in doubt and be mindful that fraudsters often carry counterfeit ID which may not reflect their real names.
- If you do not feel confident about the validity of a credit card, refuse to process the transaction.
- Be aware that you may be liable for losses incurred when a manual override is used.
The HRP/RCMP Financial Crime Unit reminds business owners of the importance of being diligent when processing transactions involving credit cards. Contact police immediately if you become aware of fraudulent credit card use.